The dollar index, tracking the greenback
against other major currencies, is on course for a 0.6% gain
this week, which would be its biggest weekly rise in about a
month. It7 edged up 0.1% on the day at 92.700.
Solid U.S. data and a shift in interest rate expectations after
the Federal Reserve flagged in June sooner-than-expected hikes
in 2023 have put a floor under the greenback over the past month
and made investors nervous about shorting it.
The gains came despite Fed Chair Jerome Powell reiterating on
Thursday that rising inflation was likely to be transitory and
that the U.S. central bank would continue to support the
economy.
"Clearly the U.S. dollar has got some power behind it," said
Westpac strategist Imre Speizer. "And I think that's holding
back all the majors."
"There's an interest rate side to it," he said. "And sometimes
it's a safe-haven bid ... we do feel that the U.S. dollar's
going to be quite strong over the next few months."
Traders will be watching out for U.S. retail sale figures for
June due later this session and looking for any reading on
inflation and the strength of the recovery.
"This will be a crucial determinant of growth in the future. As
the fiscal boost from extraordinary government spending fades,
the burden of supporting the economy falls on the consumer, who
may well be unemployed still," said Marshall Gittler, head of
investment research at BDSwiss.
The New Zealand dollar was one of the big gainers during the
Asian trading session after data showed consumer prices rose far
faster than expected, prompting some in the market to bet on a
rate hike as soon as August.
It gained as much as 1% versus the U.S. dollar and was last up
0.4% at $0.70080.
Elsewhere, the dollar gained around a third of a percent on the
Japanese yen, last at 110.08 yen . The euro slipped 0.1% against
the dollar at $1.18015.
Cryptocurrencies found support but were close to the bottom of
recent ranges with bitcoin at $31,332.
(Reporting by Iain Withers, Additional reporting by Tom
Westbrook in Singapore; Editing by Ana Nicolaci da Costa and
Steve Orlofsky)
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