The dollar was on track on Friday for a weekly gain of over 1 percent against a basket of currencies after a chorus of U.S. Federal Reserve officials signaled more interest rate increases than the market had been pricing in.
The latest was St. Louis Fed President James Bullard, who said in a speech on Thursday that another U.S. interest rate hike "may not be far off" and noted labor market improvement.
"There's not a lot that will come" in terms of data before the U.S. central bank's April 26-27 policy meeting, Bullard told reporters. "I'd like to be confident that inflation expectations are stabilizing, and hopefully increasing."
The dollar index, which tracks the greenback against a basket of six rival currencies, added about 0.1 percent to 96.213 .DXY, and was poised to gain 1.1 percent for the week.
While the dollar edged down 0.1 percent against the yen to 112.83 JPY=, it was still up 1.1 percent for the week and well above last week's 17-month low of 110.67 yen.
Data earlier on Friday showed that Japan's consumer inflation was flat in the year to February as low energy costs and weak consumption put a lid on price growth, keeping pressure on the Bank of Japan to add more stimulus even after easing policy less than two months ago.
The euro slipped 0.1 percent to $1.1162 EUR=, below last week's one-month peak of $1.1342. It was on track to lose 0.9 percent in a week marred by attacks on Brussels for which Islamic State claimed responsibility.
Oil prices steadied on Thursday, paring losses after a renewed drop in U.S. oil rigs, but analysts and traders said there could be another selloff in the coming week if U.S. crude stockpiles hit record highs again.
Earlier in the day, U.S. crude futures slid 4 percent and Brent below $40 a barrel, extending bearish sentiment from Wednesday when the U.S. government reported a crude inventory build three times above market expectations. <EIA/S>
U.S. crude's front-month contract CLc1 settled down 33 cents at $39.46 a barrel, recovering from a session low of $38.33. For the week, it rose two cents, finishing up for a sixth straight week.
Brent's front-month LCOc1 settled down 3 cents on the day at $40.44 a barrel, after an earlier drop to $39.22. For the week, it fell 76 cents, or nearly 2 percent, its first decline in six weeks.
The International Monetary Fund is warning that low oil prices have not made it easier for consumers, and in fact could be setting the global economy up for a big fall.
"Moreover, even in the United States, a net oil importer where demand has been fairly strong, cheap oil seems not to have given a substantial fillip to growth," the outlook reads.
Reference: Reuters, washingtonexaminer
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