Preheat and Prepare: Heat the oven to 350°F (175°C). Grease a loaf pan or line it with parchment paper.
Mix Dry Ingredients: In a large bowl, whisk together flour, sugar, baking powder, cinnamon, nutmeg, and salt.
Incorporate Butter and Coconut: Add softened butter and mix until crumbly. Stir in grated coconut and dried fruits, if using.
Add Wet Ingredients: In a separate bowl, whisk the egg, vanilla, and milk. Pour into the dry mixture and stir gently until combined.
Bake: Transfer batter to the loaf pan and bake for 50-55 minutes, until golden brown and a toothpick comes out clean.
Cool: Let the bread sit in the pan for 10 minutes, then transfer to a wire rack to cool completely.