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By Bloomberg

The dollar headed for its biggest weekly advance against the euro in more than a month as a rally in stocks and accelerating growth fueled speculation the U.S. economy will be resilient to a slowdown in China.

The greenback has gained against all its Group-of-10 peers except the yen this week as traders increased to 54 percent the odds the Federal Reserve will raise interest rates this year, from as low as 46 percent on Tuesday. The currencies of New Zealand and Australia, which has China as its biggest trading partner, led declines among major counterparts this week.

“The Fed will desperately try to raise rates in 2015, but they’d certainly like to see stability in equity markets before they do,” said Derek Mumford, director at Rochford Capital in Sydney, who sees the dollar strengthening against emerging- market currencies but struggling against the euro. “In equity and currency markets, huge volatility is going to continue.”

The dollar appreciated 1.1 percent during the past week to $1.1261 per euro as of 7:38 a.m. in London, the biggest gain since the period ended July 17. The greenback dropped 0.8 percent over the same period to 121.10 yen. It was little changed Friday.

The MSCI Asia Pacific Index of stocks rose for a third day, following an eight-day losing streak. The U.S. economy expanded at a 3.7 percent annualized rate last quarter, exceeding all estimates of economists surveyed by Bloomberg, a report showed Thursday. A day earlier, the Commerce Department said capital goods orders increased in July by the most in a year.

Too Soon

Kansas City Fed President Esther George said it’s too soon to tell whether market volatility will affect the U.S. economy, and every policy setting meeting is a live option to start raising rates.

“At this point, for me, I have not seen something that would change my own sense of how the economy is doing,” George said from Jackson Hole, Wyoming. “I thought there was scope to consider rate increases before now, but we’ll wait and see what the committee’s thoughts are.”

New Zealand’s dollar has fallen 3.3 percent this week to 64.66 U.S. cents, and Australia’s has declined 2.1 percent to 71.65 cents.

Dollar ‘Positive’

“If the U.S. economic data continue to come in strong, and if equity markets continue to stabilize, you’d have to think that rate hikes are back on the table, which should be positive for the dollar,” said Khoon Goh, a senior foreign-exchange strategist at Australia & New Zealand Banking Group Ltd. in Singapore.

The dollar has jumped 8 percent this year, the best performer after the Swiss franc of 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The yen gained 6.6 percent, while the euro fell 0.4 percent.