By Zhang Mengying

Investing.com – The dollar was up on Friday morning in Asia. Investors’ expectations of a huge interest rate hike in July receded.

The U.S. Dollar Index that tracks the greenback against a basket of other currencies inched up 0.03% to 108.57 by 12:41 AM ET (0441 GMT). The dollar index is on track for a third winning week, up 1.58% from last Friday.

“Momentum remains with the U.S. dollar,” Westpac currency strategist Sean Callow told Reuters, predicting the scope for the dollar index to top 111 in the coming weeks.

“The FOMC will have to remain hawkish both at the July meeting and beyond, solidifying U.S. dollar yield support.”

The USD/JPY pair inched up 0.08% to 139.01. The Bank of Japan has been committed to an ultra-easy policy to support the economy.

The AUD/USD pair inched down 0.04% to 0.6744, and the NZD/USD pair edged up 0.11% to 0.6136.

The USD/CNY pair edged up 0.10% to 6.7634, while the GBP/USD pair inched up 0.08% to 1.1832.

The EUR/USD edged up 0.13% to 1.0029. The eurozone is facing a worsening energy crisis as Russia shut down a gas pipeline for regular week-long maintenance.

The European Central Bank is likely to stick to its quarter-point rate increase.

Investors have raised bets that the U.S. Federal Reserve would deliver a super-sized interest rate hike at their July meeting on 26-27 after Wednesday showed June inflation hit a 40-year high.

However, bets were pared as Fed Governor Christopher Waller and St. Louis Fed President James Bullard both said they backed another 75 basis-point hikes for this month, despite the inflation figures.

In Asia-Pacific, data from the National Bureau of Statistics (NBS) showed that China’s gross domestic product (GDP) grew by 0.4% in the second quarter of the 2022 year on year as the second largest economy imposed stringent COVID-19 curbs in the second quarter.

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