The U.S. dollar firmed against major rivals on Friday, rebounding from recent losses, after a report showed that inflation as measured by the Fed’s preferred gauge surged in September, supporting expectations for a tapering announcement as soon as next week.
The Federal Reserve, which is set to meet next week, is widely expected to announce plans to begin scaling back its asset purchase program.
Data from the Commerce Department showed that the U.S. personal consumption expenditures index grew 4.4% on year, from 4.2% in August. On an annual basis, the core personal consumption expenditures index remained at 3.6% for the fourth straight month.
The data showed personal spending climbed by 0.6% in September after jumping by an upwardly revised 1% in August, while personal income decreased by 1% in September, after inching up by 0.2% a month earlier.
A separate report from the University of Michigan showed the consumer sentiment index for October was upwardly revised to 71.7 from the preliminary reading of 71.4.
The dollar index, which climbed to 94.30, has come off that high and is hovering around 94.15. The index had settled at 93.35 on Thursday.
Against the Euro, the dollar strengthened to 1.1563, gaining more than 1%. Flash data from Eurostat showed that Eurozone inflation accelerated sharply to the highest since 2008 on higher energy prices. The data said inflation rose to 4.1% in October from 3.4% in September.
The Pound Sterling slid against the dollar and is fetching $1.3691 a unit, about 0.75% less than Thursday’s close of $1.3793.
The dollar is trading at 113.96 yen, gaining from 113.58.
Against the Aussie, the dollar is at 0.7522, gaining about 0.3% from 0.7545.
The Swiss franc is down against the dollar at 0.9154.
The dollar is stronger against the Loonie, fetching C$1.2386 a unit. Data released by Statistics Canada showed the Canadian economy expanded 0.4% month-over-month in August, following a contraction of 0.1% in the previous period, thanks to continued easing of public health restrictions and further reopening across the country.