By Gina Lee

Investing.com – The dollar was up on Friday morning in Asia, and was set for its best week in five months. Investors are betting that inflation higher than forecast will cause central banks of the United States to increase interest rates sooner than expected.

This chart tracks the greenback relative to a basket currency and rose 0.07% by 23.41 ET (4.41 GMT) to 95.237, just below the 16-month high of 95.267.

This pair gained 0.18%, to 114.25.

Inching down by 0.10%, the pair dropped to 0.7287. The pair also fell by 0.23% to 0.7003.

Both the pair edged up 0.1% to 6.3965, and fell 0.06% at 1.3363.

U.S. inflation data were released Wednesday showing that consumer price index (CPI), rose 6.2% and 0.9% respectively in October. Core CPI, however, rose 4.6% to 0.6%.

The U.S. Federal Reserve may raise interest rates faster than anticipated, which is why investors are increasing their stakes. According to Reuters investors have begun pricing the U.S. Federal Reserve’s first rate rise by July 2022, and another one by December 2020.

“We still think market pricing has room to firm further, especially in 2023, which can further support USD,” Commonwealth Bank of Australia (OTC:) strategist Kimberley Mundy said in a note.

Meanwhile, “interest rate futures are too aggressive in pricing in European Central Bank (ECB) rate increases for 2022 considering ECB policymakers are not budging from their ultra‑dovish guidance,” giving scope for further euro weakness, the note added.

The University of Michigan Consumer Sentiment indexes and Michigan Consumer Expectations for November will be available later today. This data includes also the JOLTs Job Openings Index for September.

New York Fed President John Williams will speak at an online conference, which could provide clues to the Fed’s reaction to high inflation.

Philip Lane, chief economist at the European Central Bank will speak as part of a panel in Europe. Andrea Maechler from Swiss National Bank, who is a member on the governing board of this bank, said that even though market uncertainties are growing due to COVID-19 and other factors, the Swiss Franc has been recognized as an investment safe haven.