The
dollar headed for its biggest weekly gain in almost three years against
the euro on speculation officials from the Group of Eight nations will
signal they favor a stronger U.S. currency.
The currency
was also poised for the biggest weekly advance since 2004 versus the
yen before a government report that will probably show U.S. inflation
accelerated, boosting the case for the Federal Reserve to raise
interest rates. The dollar's gains are ``very satisfying,'' French
Finance Minister Christine Lagarde told reporters in Osaka, before
meeting her counterparts today and tomorrow. Treasury Secretary Henry
Paulson this week signaled the U.S. may buy its own currency.
The
yen headed for its fifth weekly decline versus the euro, the longest
losing streak since October, after the Bank of Japan concluded a
two-day policy meeting in Tokyo at which it left the key overnight
lending rate at 0.5 percent. The Australian dollar headed for its
biggest weekly loss in almost three months and the New Zealand currency
was poised for a third weekly decline as traders added to bets the Fed
will raise rates.
EUR/USD retreated from $1.5460 to $1.5420.
GBP/USD was bounded in $1.9450/80.
USD/JPY traded within Y107.60/00.
Eurozone data at 0900GMT sees Q1 employment data and Q1 labor
costs,which are seen rising 2.9%. US data starts at 1230GMT, when CPI
is expected to rise 0.5% in May, as energy prices are expected rebound
after the seasonally adjusted decline in the previous month. Food
prices are forecast to be more modest in the month after posting the
largest monthly gain in 18 years. Core CPI is forecast to rise 0.2% in
the month after the very tame 0.1% reading in April. US data concludes
at 1355GMT when the Reuters/University of Michigan Consumer Sentiment
Index is expected to rise very modestly to 60.0 in early-June.