US Dollar Index rose by 1.2%
The US Dollar Index measures the strength of the US dollar against the other major currencies. It saw a double uptick on January 29, 2016. Early in the day, the Bank of Japan announced a negative interest rate policy. It had a positive impact on the US Dollar Index. The Japanese yen is a major currency in the bucket of currencies that the US dollar is weighed against in the US Dollar Index. Later in the day, the release of the US advanced GDP (gross domestic product) for the fourth quarter saw the second uptick in the US Dollar Index. The US Dollar Index reached a high of 99.8 for the day.
The Bureau of Economic Analysis published the advanced GDP for 4Q15 on January 29, 2016. The GDP rose by 0.7%. It was nearly in line with the forecasts of 0.8%. Compared to the rise of 2% in the third quarter, this was slightly disappointing. It seemed that the market already factored in a fall from the highs in the third quarter. The rise of 0.7% in the GDP over the fourth quarter was primarily due to personal consumption expenditures and government spending. They were partly offset by the fall in private investments and exports.
Impact on the market
Regarding ETFs, the PowerShares DB US Dollar Bullish ETF (UUP) rose by 1.3% on January 29, 2016. The WisdomTree Bloomberg US Dollar Bullish Fund ETF (USDU) encompasses developed economies and emerging market currencies. It rose by 0.69%.
US stocks were on a positive trajectory on January 29, 2016. Lennar (LEN) and Toll Brothers (TOL) rose by 1.3% and 1.60%, respectively. Banking-related stocks also followed a similar pattern. Bank of America (BAC) rose by 1.0%.