(Adds detail, quote) BRASILIA, June 4 (Reuters) - Brazil’s real closed at its highest level against the dollar in a year on Friday, gaining around 3% on the week as the prospect of stronger economic growth and further interest rate hikes added fuel to its recent rally. The real’s second week of solid appreciation coincided with surprisingly upbeat first quarter gross domestic product data on Tuesday, which sparked a wave of upward revisions to 2021 growth forecasts to as high as 5.5%. The real closed trading on Friday at 5.0360 per dollar , its strongest close since June 10 last year and up almost 1% on the day. Luciano Rostagno, chief strategist at Mizuho in Sao Paulo, noted that the real outperformed its peers for the second week in a row. “The resilience of the Brazilian economy is helping ease fiscal concerns and boosting the real. The next major resistance level to watch for is the 5.00 per dollar level, which was resistance that capped the rally in December,” Rostagno said. Not only did first-quarter GDP figures this week beat expectations, but the services sector expanded too, suggesting that the economy has learned to function with COVID-related restrictions, he noted. In March the real was down around 12% against the dollar since the turn of the year and was one of the worst-performing currencies in the world. But an aggressive start to the central bank’s policy tightening cycle to quell inflation, resilient economic data and a deepening market consensus that GDP growth and interest rates will push higher have turned that on its head. The real is now up around 2.5% year to date, closely tracking the move in interest rate spreads, a close barometer of the fiscal concerns which play a key role in the exchange rate. The spread between January 2022 and January 2027 rate futures narrowed this week to 320 basis points, the tightest since March last year. Reporting by Jamie McGeever Editing by Chris Reese and Cynthia Osterman Our Standards: The Thomson Reuters Trust Principles.