FOREX-Dollar set for second weekly loss amid U.S.-Iran ceasefire deal

* Dollar set for small weekly fall on possible US-Iran ceasefire extension

* Kiwi ​reaches strongest ⁠level in three months

* Yen near key 160 ​level; data confirms intervention last month (Recasts headline and first paragraph, updates prices throughout and adds analyst quote in paragraph 5)

NEW ​YORK, ‌May 29 (Reuters) - The dollar fell against other major currencies on Friday and was on track for its second consecutive week of losses ⁠after the U.S. and Iran reportedly reached an agreement to extend ⁠their ceasefire and lift restrictions on shipping through ​the Strait of Hormuz.

U.S. President Donald Trump said he would make a final decision on Friday over a deal with Iran to extend their ceasefire. That deal would extend the truce for another 60 days and allow traffic to ​flow through ‌the strategic waterway while negotiators tackle difficult issues such as Iran's nuclear programme, four sources told Reuters.

The dollar had rallied at the outbreak of the conflict, drawing safe-haven flows and benefiting from the U.S. economy’s relatively limited exposure to energy-price inflation. But the greenback has since given back those gains as uncertainty over the war’s trajectory weighed ​on sentiment.

The euro was up 0.26% at $1.1678 and was on track for a weekly gain, while the pound was ‌up 0.23% against the dollar at $1.3473.

"We don't have answers about a lot of things and it's creating a divergence or lack of consensus or complete narrative especially ‌for central banks," said Juan Perez, director of trading at Monex USA in Washington. "That's why you're seeing that reflected in the lack of movement in the U.S. dollar overall."

The dollar index, which measures the greenback against a basket of ​currencies, was down 2% at 98.81, on track for a second straight week of losses.

Data on Thursday showed U.S. inflation rising at ‌its fastest pace in three years in April, driven by higher energy prices due to the Iran war and cementing economists' views that the Federal Reserve will hold interest rates unchanged well into next year.

YEN INTERVENTION WATCH

The Japanese ⁠yen traded at ⁠159.22 per dollar, remaining near the traditionally significant 160 level that has historically ‌prompted interventions by Japanese authorities.

Japan's Ministry of Finance confirmed on Friday that the government spent 11.7 trillion yen ($73.5 billion) intervening in currency markets over ​the past month to ​support the yen, confirming what traders had widely suspected.

The Australian dollar was up ‌0.41% at $0.71915. The kiwi rose nearly 1% to $0.59920, its strongest level in more than three months, extending a recent rally after the Reserve Bank of New Zealand suggested rate hikes were likely.