LONDONSINGAPORE, March 31 Reuters The euro was set for its best week since mid January on Friday ahead of inflation data that will shape the ECB39;s interest rate plans, while investor expectations U.S. rates are near peaking meant the dollar headed for a second consecutive quarterly loss.

The European common currency was at 1.0883, down 0.2 on the day, but heading for a 1.1 weekly gain, its most in 11 weeks, as well as monthly and quarterly increases.

Europewide inflation data is due at 0900GMT. Higher thanexpected German inflation figures released Thursday have reinforced expectations that there are a few more rate increases left from the European Central Bank.

French inflation data on Friday also came in a whisker above expectations, and Dutch inflation also rose.

Inflation data in the eurozone will be an important driver, for the euro said Francsco Pesole, FX strategist at ING, who expects the euro to reach 1.10 some time next week, after consolidating today.

He said a big chunk of the inflationinduced move already happened after yesterdays German figures were released. The euro rose 0.56 on Thursday.

Also on today39;s agenda is core personal consumption expenditures PCE price index, the Federal Reserve39;s preferred inflation measure.

A BUSY QUARTER

In terms of the bigger picture, the dollar index is down 1.2 for the quarter, extending a 7.7 fall in the fourth quarter of 2022, as its modest boost from a rush to safety around midMarch as European banking…