NEW YORK/LONDON (Reuters) - The U.S. dollar was on course on Friday for a second week of gains after a turbulent few days when currencies were buffeted by shifting risk appetite, with the market’s focus now on next week’s Federal Reserve meeting. Some analysts wondered, though, whether the dollar’s recent rally may be losing momentum. The dollar index, which measures the greenback against a basket of six major currencies, was slightly higher on the day at 92.877. For the week, it is up 0.2%, after rising 0.6% previously. But that was off a 3-1/2-month high of 93.194 hit on Wednesday, after strong Wall Street earnings helped investors regain some confidence amid earlier worries that the Delta coronavirus variant could derail the global recovery. Risk appetite among investors remained high on Friday, with U.S. stocks rising, U.S. Treasuries selling off, most commodity currencies well-bid on the day, and the greenback off its peaks. “The dollar looks tired especially after the rally of the last few weeks,” said Erik Nelson, macro strategist, at Wells Fargo Securities in New York. “It seems to be running out of steam both from a fundamental and technical perspective.” So far in July, the dollar has gained 0.6%, after rising 2.8% in June. Graphic: Dollar set for second week of gains: Wells Fargo’s Nelson, however, was not convinced the dollar could hold its gains in the coming weeks given the decline in U.S. Treasury yields. Since the beginning of July, U.S. benchmark 10-year Treasury yields have lost 16 basis points, on track for their largest monthly fall since March 2020. “You had a huge move lower in U.S. rates. I also think the Fed is going to be one of the laggards among central banks normalizing policy,” Nelson said. The market’s next major focus is the Fed’s two-day policy meeting next week. Since the previous meeting on June 16, when Fed officials dropped a reference to the coronavirus as a weight on the economy, cases have risen. Many economists, however, still expect the meeting to advance discussions for a tapering of stimulus. Against the safe-harbour yen, the dollar rose 0.3% to 110.53 yen. Meanwhile, the euro was down 0.1% at $1.1763, showing little reaction to the purchasing manager surveys coming out of France, Germany and the euro zone as a whole. Euro zone business activity expanded at its fastest monthly pace in over two decades in July as the loosening of more COVID-19 restrictions gave a boost to services, but fears of another wave of infections hit business confidence. The data came in the wake of the European Central Bank’s meeting on Thursday, in which it pledged to keep interest rates at record lows for even longer. The Australian dollar - viewed as a proxy for risk appetite - slid 0.1% to US$0.7374, heading for a fourth straight weekly loss. With half the Australian population under lockdown, economists said the country’s central bank could increase stimulus rather than decrease it at its next policy meeting. ======================================================== Currency bid prices at 9:59AM (1359 GMT) Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Dollar index 92.9370 92.8310 +0.12% 3.285% +93.0280 +92.7770 Euro/Dollar $1.1765 $1.1771 -0.05% -3.70% +$1.1787 +$1.1755 Dollar/Yen 110.4150 110.1550 +0.23% +6.86% +110.5850 +109.9200 Euro/Yen 129.90 129.65 +0.19% +2.35% +130.1800 +129.6300 Dollar/Swiss 0.9206 0.9192 +0.15% +4.06% +0.9222 +0.9187 Sterling/Dollar $1.3752 $1.3769 -0.13% +0.66% +$1.3779 +$1.3720 Dollar/Canadian 1.2588 1.2555 +0.28% -1.13% +1.2593 +1.2552 Aussie/Dollar $0.7372 $0.7384 -0.16% -4.17% +$0.7400 +$0.7359 Euro/Swiss 1.0829 1.0819 +0.09% +0.20% +1.0841 +1.0817 Euro/Sterling 0.8555 0.8547 +0.09% -4.27% +0.8584 +0.8547 NZ $0.6976 $0.6975 +0.02% -2.85% +$0.6992 +$0.6961 Dollar/Dollar Dollar/Norway 8.8730 8.8495 +0.00% +3.06% +8.8790 +8.8355 Euro/Norway 10.4405 10.4076 +0.32% -0.26% +10.4498 +10.4065 Dollar/Sweden 8.6939 8.6771 +0.11% +6.07% +8.6982 +8.6723 Euro/Sweden 10.2270 10.2160 +0.11% +1.49% +10.2325 +10.2068 Reporting by Gertrude Chavez-Dreyfuss in New York and Ritvik Carvalho in London; Editing by Pravin Char and Mark Potter Our Standards: The Thomson Reuters Trust Principles.