WASHINGTON (dpa-AFX) - The U.S. dollar pared early gains against its major counterparts on Friday after expectations for an aggressive tightening of monetary policy by the Fed dropped a bit following the latest data on core consumer price growth and personal income and spending.
Data released by the Commerce Department showed core consumer price growth accelerated to a nearly 40-year high in December.
The Commerce Department's reading on inflation, which is said to be preferred by the Federal Reserve, showed the annual rate of core consumer price growth accelerated to 4.9% in December, reaching the highest level since September 1983.
At the same time, the report also showed personal spending fell by 0.6% in December after rising by 0.4% in November. The decrease in spending matched economist estimates.
Excluding price changes, real personal spending tumbled by 1% in December after slipping by 0.2% in the previous month.
The data said personal income rose by 0.3% in December after climbing by an upwardly revised 0.5% in November.
Economists had expected personal income to advance by 0.5% compared to the 0.4% increase originally reported for the previous month.
The dollar index, which climbed to 97.44 in the European session, dropped to 97.06 by noon before recovering to 97.22. The index had closed at 97.26 on Thursday.
Against the Euro, the dollar is down slightly at $1.1150, after having weakened to $1.1175 from $1.1122.
The dollar is trading at $1.3400 against Pound Sterling, recovering from $1.3434.
The dollar is trading at 115.24 yen, dropping from 115.37 yen.
Against the Aussie, the dollar is at $0.6995, gaining from $0.7033.
The Swiss franc is at 0.9311 a dollar, gaining slightly from 0.9314. Meanwhile, the Loonie is trading at 1.2767 a dollar, down from Thursday's close of 1.2742.
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