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<\/a><\/p>\nBy Gertrude Chavez-Dreyfuss<\/p>\n
NEW YORK (Reuters) – The U.S. dollar rose on Friday after data showed inflation grew in March, though at a slower pace, keeping the Federal Reserve still firmly on track to raise interest rates at next week’s monetary policy meeting.<\/p>\n
The yen, meanwhile, fell across the board, after the Bank of Japan said it would maintain ultra-low interest rates as expected, and unanimously decided to make no changes to its yield curve control (YCC) policy.<\/p>\n
The Japanese currency plunged to its lowest since September 2008 against the euro, and its weakest level in seven weeks versus the dollar. <\/p>\n
The euro was last up 1.5% against the yen at 150. On the week, Europe’s single currency rose 1.8%.<\/p>\n
The dollar, on the other hand, last traded 1.7% higher at 136.235 yen, posting a weekly gain of 1.6%, its best weekly performance since late February.<\/p>\n
The dollar index, a measure of the greenback’s value against six major currencies, rose 0.2% to 101.65. <\/p>\n
Friday’s data showed the personal consumption expenditures (PCE) price index edged 0.1% higher in March after rising 0.3% in February. In the 12 months through March, the PCE price index increased 4.2% after climbing 5.1% in February.<\/p>\n
Excluding the volatile food and energy components, the PCE price index inched up 0.3% after increasing at the same rate in February. The so-called core PCE price index gained 4.6% on a year-on-year basis in March after rising 4.7% in February. The Fed tracks the PCE price indexes for its 2% inflation target.<\/p>\n
“You probably need a much bigger slowing in the growth rate to get the Fed comfortable that it\u2019s succeeded in its mission; it’s not there yet,” said Joseph Lavorgna, chief U.S. economist at SMBC Nikko Securities in New York. “It doesn’t change the outlook (for policymakers next week).” <\/p>\n
Following the inflation data, the rate futures market has priced in a 90% chance of a 25 basis-point hike next week.<\/p>\n
A separate report on Friday showing the final University of Michigan consumer sentiment reading of 63.5 in April, up from a three-month low 62 in March, added to dollar gains. U.S. consumers’ one-year inflation outlook was 4.6 this month from 3.6 in March, further underpinned rate hike expectations, boosting the dollar as well.<\/p>\n
The euro, meanwhile, slipped 0.1% against the dollar to $1.1017. <\/p>\n
Economic data painted a mixed picture for growth and inflation across the euro zone, raising uncertainty around the size of the European Central Bank’s expected interest rate hike next week.<\/p>\n
Preliminary data showed gross domestic product in the euro zone expanded by 0.1% in the first quarter, below expectations in a Reuters poll for 0.2%. <\/p>\n
The single European currency had fallen much more earlier in the session, but trimmed losses as investors sold the yen against the euro. That spilled over to the euro\/dollar cross.<\/p>\n
“We think the balance of probabilities is gradually shifting in the dollar’s favour,” wrote Jonathan Petersen, senior market economist at Capital Economics in a research note.<\/p>\n
“The ‘goldilocks’ regime of stronger activity data outside of the U.S. seems to be fading, and we anticipate the dollar benefiting from safe-haven demand once the global growth picture starts to deteriorate more substantially in coming months.”<\/p>\n
========================================================<\/p>\n
Currency bid prices at 3:26PM (1926 GMT)<\/p>\n
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid <\/p>\n
Previous Change <\/p>\n
Session <\/p>\n
Dollar index 101.6400 101.4500 +0.20% -1.788% +102.1700 +101.4200 <\/p>\n
Euro\/Dollar $1.1018 $1.1029 -0.10% +2.83% +$1.1045 +$1.0963 <\/p>\n
Dollar\/Yen 136.2350 134.0100 +1.66% +3.91% +136.5600 +133.3600 <\/p>\n
Euro\/Yen 150.00 147.77 +1.51% +6.91% +150.4300 +147.2300 <\/p>\n
Dollar\/Swiss 0.8936 0.8944 -0.07% -3.34% +0.8975 +0.8896 <\/p>\n
Sterling\/Dollar $1.2563 $1.2500 +0.50% +3.88% +$1.2584 +$1.2447 <\/p>\n
Dollar\/Canadian 1.3547 1.3591 -0.32% -0.01% +1.3668 +1.3536 <\/p>\n
Aussie\/Dollar $0.6615 $0.6630 -0.22% -2.95% +$0.6642 +$0.6573 <\/p>\n
Euro\/Swiss 0.9846 0.9862 -0.16% -0.50% +0.9868 +0.9816 <\/p>\n
Euro\/Sterling 0.8769 0.8824 -0.62% -0.85% +0.8839 +0.8768 <\/p>\n
NZ $0.6184 $0.6148 +0.59% -2.61% +$0.6187 +$0.6124 <\/p>\n
Dollar\/Dollar <\/p>\n
Dollar\/Norway 10.6650 10.6210 +0.44% +8.70% +10.7690 +10.6290 <\/p>\n
Euro\/Norway 11.7497 11.7106 +0.33% +11.97% +11.8338 +11.6981 <\/p>\n
Dollar\/Sweden 10.2563 10.2857 -0.46% -1.46% +10.3522 +10.2405 <\/p>\n
Euro\/Sweden 11.3011 11.3530 -0.46% +1.36% +11.3720 +11.3010 <\/p>\n
\n(Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Herb Lash in New Yoek, Joice Alves in London and Rae Wee in Singapore; Editing by Andrew Heavens, Andrea Ricci and Jonathan Oatis)<\/p>\n
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