* Dollar drops in wake of dovish Fed minutes
* Aussie hits 7-week high, NZ dollar hits 10-wk high
* Dollar index nurses losses, hits 3-week low (Updates prices, adds comments; changes dateline; previous LONDON)
By Sam Forgione
NEW YORK, Oct 9 (Reuters) - The U.S. dollar hit multi-week lows against the euro and Swiss franc on Friday after Thursday’s minutes from the Federal Reserve’s September meeting bolstered expectations for a later interest rate hike, while growth-linked currencies surged.
The dollar index, which measures the greenback against a basket of six major currencies, was set for its second straight week of losses after the minutes focused on external factors depressing the outlook for inflation.
“The comments about inflation remaining low, the concern that that’s going to push the hike out to next year is exactly what’s driving currencies across the board,” said Jason Leinwand, managing director at Riverside Risk Advisors in New York.
The euro hit a three-week high against the greenback of $1.13790, while the dollar hit a three-week low against the Swiss franc of 0.95870 franc. The dollar index also hit a three-week low of 94.721.
The dollar rose, however, against the safe-haven yen as the outlook for accommodative central bank policy around the world drove traders into riskier currencies.
The Australian dollar hit a 7-week high against the greenback of $0.7344 and was set for its strongest weekly performance since late 2011 on the view that accommodative central bank policies would support global growth.
The New Zealand dollar, meanwhile, hit a more than 10-week high against the dollar of $0.6722.
“The notion that central banks would leave in low rates for longer could help put a floor under the global economy,” said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.
Some riskier emerging market currencies also gained against the dollar on the view the outlook for accommodative central bank policy. The dollar was last down about 1 percent against the Brazilian real to trade at 3.7464 reals after hitting a more than five-week low of 3.7341 reals earlier in the session.
“What we’re seeing is markets are finding a green light to put on risk on the notion that central banks collectively would maintain low rate policies for longer,” Manimbo said.
The euro was last up 0.66 percent against the dollar at $1.13500. The dollar was last down 0.4 percent against the franc at 0.96220 franc <CHF=EBS. The dollar was last up 0.28 percent against the yen at 120.270 yen.
The dollar index was last down 0.37 percent at 94.960. (Reporting by Sam Forgione; Additional reporting by Anirban Nag in London; Editing by Dan Grebler)