U.S. Dollar Higher

The U.S. dollar turned higher on Friday, spurred off its early losses by a U.S. inflation report that indicated underlying pressures are building and thereby bolstering the case for the U.S. Federal Reserve to raise interest rates later this year.

“Stronger inflation, along with stronger growth data, is something that the Fed certainly wants to see,” said Brian Daingerfield, currency strategist at the Royal Bank of Scotland in Stamford, Connecticut. “Rate hike expectations have likely been brought forward as a result of some of the stronger data today.”

The euro’s gains were cut and the buying momentum for the dollar increased as the morning New York session incorporated the U.S. Consumer Price Index data.