Current dollar for weekly gain; the kiwi leaps with inflation

SINGAPORE, July 16 (Reuters) – The dollar on Friday headed for its best weekly gain in about a month, supported by investor concerns about accelerating US interest rate hikes and rising prices. viral infections, while a sharp rise in inflation raised the dollar.

The kiwifruit was the biggest driver among the morning trading majors, and last rose 0.4% to $ 0.7003, after consumer prices rose much faster than expected at a record pace of the decade of 1.3% for the June quarter and 3.3% for the year.

The reading pushed forward expectations for rate hikes to next month, with markets now estimating an 86% chance that the Reserve Bank of New Zealand will become the first developed market central bank to break out of emergency policy parameters.

Yet against a firm greenback, even this surprising prospect has so far failed to push the New Zealand currency out of recent ranges, and for the week the kiwi has only risen 0.1%. .

The dollar was broadly flat elsewhere on Friday but was heading for weekly gains, with a week so far up 0.5% against the euro, about as much against the pound and a bit higher, to 0 , 9%, against the Australian dollar.

“It’s clear that the US dollar has some power behind it, and I think that’s holding back all the majors,” said Imre Speizer, Westpac strategist.

“There’s an interest rate side, and sometimes it’s a safe haven offering… we think the US dollar is going to be pretty strong over the next few months,” he said, as data Strong US dollars are fueling higher yields and rate hike expectations.

The US dollar index, which measures the greenback against a basket of currencies, was flat at 92.604 on Friday and up 0.5% for the week.

Next Friday, traders look to US retail sales data and consumer confidence for any reading on inflation and the strength of the recovery. The Bank of Japan concludes a two-day meeting, but it is unlikely to change the parameters of its policy.

PANDEMIC

The mood in financial markets has been stark as viral infections increase around the world. Investors have been hopeful of what will happen in highly vaccinated England in the coming weeks, after most restrictions are expected to be lifted on Monday. Read more

Treasuries rallied for the third week in a row as concerns over the spread of the contagious Delta variant and a bet on transitory inflation – or at least quickly contained by central bankers – dragged down yields long. term.

Safe havens for the yen and Swiss franc have also been firm, with the yen rising 0.2% against the dollar on the week so far and heading for its best week in a month against the euro.

The yen last bought 109.98 per dollar and 129.86 per euro. The euro stood at $ 1.1808, not far from the three-month low of $ 1.1772 it tested during the week.

The British pound traded at $ 1.3832 at the start of the Asian session, after returning part of a rebound that came with strong jobs numbers and hawkish comments on Thursday from the Bank’s policymaker. ‘England Michael Saunders.

The risk-sensitive Australian dollar was also a victim of the cautious mood and the foreclosure of Melbourne and Sydney. It fell 0.9% on the dollar this week to $ 0.7423 and is at a more than five-month low on the kiwi.

The Thai baht, one of the currencies most affected by the strength of the dollar and the resurgence of the pandemic, moved closer to a fifth consecutive weekly loss as tourism-dependent Thailand saw record infections.

Cryptocurrencies were dangerously close to the low end of recent ranges with bitcoin at $ 31,660 and ether at $ 1,910.

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Price of currency offers at 144 GMT

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Reporting by Tom Westbrook; Editing by Muralikumar Anantharaman

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