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By Bloomberg

The dollar headed for its first winning week this month as investors speculated the Federal Reserve remains on course to raise interest rates this year.

A gauge of the U.S. currency against major peers climbed Thursday after traders reassessed the implications from minutes of the Fed’s January policy meeting, released a day earlier. The dollar was set for a first weekly gain since Jan. 23 versus the euro as the single currency was buffeted by Greek bailout negotiations. Expected price swings over a one-week horizon reached the highest since Feb. 6 before a meeting of European finance ministers Friday.

“The Fed has seen some strong economic data from the likes of the payrolls reports,” which will keep policy makers on track to raise borrowing costs this year, said Imre Speizer, a markets strategist at Westpac Banking Corp. in Auckland. “The market over-interpreted the dovish elements of the minutes, and then took it back,” pushing up the dollar, he said.

The Bloomberg Dollar Spot Index was little changed at 1,166.25 as of 11:42 a.m. in Tokyo from Thursday, when it gained 0.5 percent, its biggest advance since Feb. 11. It has risen 0.3 percent this week.

The U.S. currency traded at $1.1369 per euro after appreciating 0.3 percent to $1.1368 Thursday. It bought 118.93 yen from 118.95 in New York, following a 0.1 percent gain.

For the week, the dollar is 0.2 percent higher against both the euro and the yen.

Rate Increase

While investors pushed back bets on when the Federal Open Market Committee would raise interest rates, they’re still showing confidence an increase is likely by year-end.

The odds fell Wednesday as the record of the Jan. 27-28 Fed meeting showed many participants pointed to the strength of the currency, international flash points from Greece to Ukraine, and slow wage growth as weakening the case for the first rate rise since 2006.

The main lending rate has been in a range of zero to 0.25 percent since 2008.

Federal fund futures traded on the CME Group Inc. exchange give a 19 percent chance the central bank will lift rates at their policy meeting in June, according to data compiled by Bloomberg. That’s down from 25 percent on Feb. 17. They show a 78 percent chance by December.

“Despite the initial reaction to the Fed’s minutes, some investors stepped back and thought the U.S. economic data were actually solid,” said Neil Jones, head of hedge fund sales at Mizuho Bank Ltd. in London. “A rate increase by the Fed may not be immediate, but 2015 is still a possibility. Any dollar weakness may be temporary.”

Unemployment Eases

The greenback gained as jobless claims fell by 21,000 to 283,000 in the week ended Feb. 14, from 304,000 in the prior period, a Labor Department report showed Thursday in Washington. The median forecast of 50 economists surveyed by Bloomberg News called for 290,000.

Payrolls rose more than economists forecast in January, capping the strongest three months of jobs growth in 17 years. The data were released Feb. 6, after the Fed’s January policy meeting.

“Everybody wants to be here in the U.S.,” Michael Levas, founder and chief investment officer of Olympian Capital Management LLC, said in an interview in New York. “Everybody feels safety and security in owning U.S. paper, whether it’s U.S. government bonds or the dollar.”

The euro fell against most of its developed-nation peers and volatility rose before Greece faces its creditors Friday.

One-week implied volatility for the euro-dollar pair rose as high as 13 percent, a two-week high. By comparison, one-month and one-year gauges were at 11 percent and 10 percent, respectively.