NEW YORK, Oct 16 — The dollar is set for its longest weekly losing streak since May as sluggish economic data underscores investor expectations that the Federal Reserve won’t raise interest rates this year.

The greenback fell against most of its 16 major counter parts over the past week, with the New Zealand dollar and the yen among the biggest gainers for developed-nation currencies.

The kiwi headed for its steepest three-week gain in two years against the dollar while the yen was set for its best five-day performance since the start of September.

“The recent economic news suggests the economy is slowing,” Federal Reserve Bank of New York President William C. Dudley said yesterday in Washington.

“The dollar is under pressure generally because of growing views that a Fed rate increase would be difficult this year and could be pushed back to March,” said Yasuhiro Kaizaki, vice president for global markets at Sumitomo Mitsui Trust Bank Ltd. in New York.

The Bloomberg Dollar Spot Index, which tracks the US currency versus 10 peers, was at 1,186.36 as of 9:11am in Tokyo. It was at 1,185.23 in New York, the lowest closing level in more than three months. The gauge has dropped 0.6 per cent since Oct. 9.

The US currency was little changed at 119.12 per yen, set for a weekly loss of 1 per cent.

The New Zealand dollar fell 0.2 per cent to 68.37 US cents after advancing 0.9 per cent yesterday.

The kiwi has climbed 7.1 per cent since Sept. 25, the best three-week performance since September 2013. The currency was supported by a surge in diary product prices which prompted speculators to scale back bets for further weakness in the New Zealand dollar.

Fed divided

Dudley said he still favors raising interest rates later this year if his forecasts for the economy are met. Cleveland Fed President Loretta Mester later said it’s time for policy makers to “take a step back” from the emergency monetary policy of zero interest rates.

Earlier in the week, Board of Governors member Daniel Tarullo said he doesn’t currently favor raising rates in 2015.

Consumer prices excluding food and fuel rose 0.2 per cent last month from August, the most in three months, according to a government report yesterday.

Other indicators signaled deeper declines in manufacturing, while data a day earlier had showed weaker-than-expected retail sales and wholesale prices. — Bloomberg