Dollar heads for best week this year before data

Kuala Lumpur - The dollar headed for its best week this year before reports forecast to show inflation and retail sales both increased last month, backing the case for the Federal Reserve to keep raising interest rates.

The greenback has gained versus all of its Group-of-10 peers this week after payroll data and producer prices exceeded economists’ estimates.

Cleveland Fed President Loretta Mester said the US economy warrants gradual policy tightening, while Boston Fed chief Eric Rosengren called for three more rate hikes this year. New Zealand’s dollar fell after manufacturing growth slowed.

“Sentiment for the dollar has turned brighter and it is gaining more support on dips since the start of the week,” said Daisaku Ueno, chief foreign-exchange strategist at Mitsubishi UFJ Morgan Stanley Securities in Tokyo.

In the longer run, the dollar is expected test its upside due to the growing likelihood of another Fed rate hike.”

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