Dollar is on its way to achieve weekly gains

The dollar is heading for its best week in a month on Friday, as comments from Federal Reserve officials and stronger-than-expected retail sales data curbed the US currency’s slide after signs of easing inflation.

It was also helped by Thursday’s 0.4 percent decline in the British pound after a British budget for tax increases and spending cuts frustrated investors.

James Bullard, President of the Federal Reserve Bank of St. Louis, was the latest official in the Federal Reserve to seek to limit the ceiling of market ambitions to stop raising interest rates, saying that even under cautious assumptions, the interest rate for overnight lending should be raised to Between 5.0 and 5.25 percent at least to curb inflation, up from 3.75 and 4.0 percent now.

He added that the most pessimistic assumptions are in the direction of an increase of above seven percent.

The dollar rose slightly against the yen following Pollard’s comments, gaining about 1 percent for the week.

It also rose 0.9 percent against the Australian dollar to 0.6690 Australian dollar, and is on its way to achieving its first weekly gain against its Australian counterpart since mid-October.

The US dollar index rose about 0.16 percent so far this week to 106.59, to stabilize after a slight drop in US inflation last week caused one of the sharpest weekly declines for the dollar.