Reuters, SINGAPORE, July 16 – The dollar was poised for its highest weekly gain in over a month on Friday, boosted by buying amid investor concerns about faster U.S. interest rate hikes and mounting virus infections, while the New Zealand dollar was lifted by a strong inflation reading. In early trade, the kiwi was the largest mover among the majors, rising 0.4 percent to $0.7003 after consumer prices grew at a decade-high rate of 1.3 percent for the June quarter and 3.3 percent for the year, significantly faster than predicted. The result has pushed forward expectations for a rate rise to next month, with markets now putting in an 86 percent possibility that the Reserve Bank of New Zealand will be the first developed-market central bank to exit emergency policy settings. Against a strong greenback, however, even that intriguing prospect has failed to rouse the New Zealand currency from recent ranges, and the kiwi is only up 0.1 percent for the week. The dollar was largely unchanged elsewhere on Friday, but it was on track for weekly gains, with gains of 0.5 percent against the euro, nearly the same against sterling, and a bit more, at 0.9 percent, against the Australian dollar so far this week. “Clearly, the US dollar has some clout, and I believe that’s holding back all the majors,” Westpac strategist Imre Speizer said. “There’s an interest rate side to it, and sometimes it’s a safe-haven bid…we do believe that the US dollar will be pretty strong over the next few months,” he added, citing solid US data as a source of higher yields and rate-increase expectations. On Friday, the US dollar index, which measures the greenback against a basket of currencies, was unchanged at 92.604, up 0.5 percent for the week. Traders will be watching U.S. retail sales data and consumer confidence for clues on inflation and the strength of the recovery on Friday. The Bank of Japan wraps up a two-day meeting, but no policy changes are expected. PANDEMIC As global viral infections rise, the mood on financial markets has been gloomy. After most restrictions are due to be relaxed on Monday, investors are pinning their hopes on what happens in highly-vaccinated England in the next weeks. find out more Concerns over the spread of the contagious Delta variety, as well as a bet on inflation being temporary – or at least managed quickly by central bankers – have pushed long-end rates lower for the third week in a row. The yen and the Swiss franc have also been strong safe-haven assets, with the yen up 0.2 percent against the dollar this week and on track for its best week in a month against the euro. The yen last traded at 109.98 to the dollar and 129.86 to the euro. The euro was trading at $1.1808, just above a three-month low of $1.1772 hit earlier this week. Sterling was trading at $1.3832 in the early Asian session, having given back some of the gains made following strong jobs data and hawkish comments from Bank of England policymaker Michael Saunders on Thursday. The risk-sensitive Australian dollar has also suffered as a result of the cautious mood and Melbourne and Sydney’s lockdown. The kiwi has dropped 0.9 percent against the dollar this week to $0.7423, a more than five-month low. As tourism-dependent Thailand announced record infections, the Thai baht, one of the currencies most hit by the dollar’s strength and the pandemic’s revival, was tracking toward a fifth consecutive weekly loss. With bitcoin at $31,660 and ether at $1,910, cryptocurrencies were perilously close to the bottom of recent ranges. ======================================================== At 144 GMT, currency bid prices were set. Each and every location Locations in Tokyo, Europe Volatilities BOJ provides information on the Tokyo foreign exchange market. Tom Westbrook contributed reporting, and Muralikumar Anantharaman edited the piece. The Thomson Reuters Trust Principles are our standards./n
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