The dollar headed for a fourth weekly gain today after data showed US inflation did not pick up as strongly as expected in July. This fact helped reinforce the existing view among investors that the Federal Reserve is unlikely to raise rates much more.
The stronger dollar put the Japanese yen on course to test a key support level, though liquidity was thin with Japan on holiday on Friday. Japan intervened in currency markets last September when the dollar rose past 145 yen, which prompted the Ministry of Finance to buy the yen and push the pair back to around 140 yen. The yen is down over 9% against the dollar for the year. The yen was also lower against the euro at 158.98 per euro, which hit a 15-year peak of 159.19 on Thursday.
Meanwhile, sterling rose for the first time in four days after data showed the British economy grew more than expected in June, allaying some concern about the impact of high inflation and high rates on activity. The pound was last up 0.3% at $1.2711, but was still heading for a fourth weekly drop.
The dollar fell against the euro , which rose 0.1% to $1.0995 and against the Australian dollar, which rose 0.14% to $0652.
Source: reuters.com
