- U.S. dollar index heads for 0.5% weekly rise
- Virus jitters, rates outlook keeps USD supported
- NZD jumps as inflation surges to decade-high
SINGAPORE, July 16 (Reuters) – The dollar headed on Friday for its best weekly gain in about a month, supported by buying on investor worries about quicker U.S. interest rate increases and by rising virus infections, while a hot inflation reading lifted the New Zealand dollar.
The kiwi was the biggest mover amongst majors in morning trade, and was last up 0.4% at $0.7003, after consumer prices rose far faster than expected at a decade-high pace of 1.3% for the June quarter and 3.3% for the year.
The reading has brought forward rate hike expectations to next month, with markets now pricing an 86% chance the Reserve Bank of New Zealand becomes the first developed-market central bank to exit from emergency policy settings.
Still, against a firm greenback, even that startling prospect has so far failed…