FOREX-Dollar set for weekly loss amid US-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 (Updates prices throughout, adds analyst quote)

NEW YORK, May 29 (Reuters) - The dollar slipped against major currencies on Friday and was headed for ​a ‌second straight weekly loss after reports that the United States and Iran had reached an agreement to extend their ceasefire and ease restrictions on shipping through ⁠the Strait of Hormuz.

U.S. President Donald Trump said he would make ⁠a final decision on Friday on a deal ​to prolong the truce with Iran. The proposed agreement would extend the ceasefire by 60 days and allow traffic to resume through the strategic waterway while negotiators work through contentious issues, including Iran’s nuclear programme, four sources told Reuters.

The greenback had initially rallied at the onset ​of the conflict, ‌buoyed by safe-haven demand and the U.S. economy’s relatively limited exposure to energy-driven inflation. However, it has since surrendered some of those gains as uncertainty surrounding the conflict’s trajectory has weighed on investor sentiment.

The euro was up 0.12% at $1.16620 and was on track for a weekly gain. The pound sterling was up 0.18% against the dollar at $1.3466, marking the second straight week of gains.

"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 flat at 98.92, on track to notch a weekly loss. 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.

"Equities are ignoring any issues about economic disruption and you're getting pretty much ‌the same type of stasis in the currencies because if you look at the potential for rate increases, according to the CME and futures, it's all on the side of rate increases," said Joseph Trevisani, senior analyst at FXStreet.

"There's nothing in the horizon but potential ⁠rate increases. Yet ⁠you're not seeing higher dollar rates."

YEN INTERVENTION WATCH The Japanese yen traded at 159.27 ‌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 0.31% at $0.71840. The kiwi rose nearly 0.85% to $0.5985 after hitting its strongest level in more than three months, extending a recent rally after the Reserve Bank of New Zealand suggested rate hikes were likely.