Dollar snaps five-week losing streak as bets on US rate hike in May firm

The dollar was eyeing its first weekly gain in more than a month on Friday as bets for another rate hike by the U.S. Federal Reserve in May firm, though its gains were capped by soft economic data pointing to a slowing economy.

In Asia, Japan’s consumer inflation held steady above the central bank’s target in March, with a key index hitting a four-decade high, putting pressure on the Bank of Japan (BOJ) to shift away from its ultra-loose monetary policy stance.

The dollar slipped against the Japanese yen in early Asia trade, though it rose against most major currencies, with the U.S. dollar index edging 0.06% higher to 101.84.

The index, which measures the greenback against six major peers, was on track for a weekly gain of more than 0.2% after five straight weeks of losses.

Rising expectations that the Fed will raise interest rates by 25 basis points in May have lent some support to the greenback. Money markets are now pricing in an 84.5% chance of such a hike next month, as compared to a 67% chance a week ago, according to the CME FedWatch tool.

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