WASHINGTON (dpa-AFX) - The U.S. dollar traded weak against most of its major counterparts on Friday amid bets the Federal Reserve will start cutting rates sometime soon this year after data showed the nation's core PCE inflation came in lower than expected in December.
The Commerce Department said consumer prices in December were up by 2.6% compared to the same month a year ago, unchanged from November and in line with economist estimates.
Meanwhile, the report said the annual rate of growth by core consumer prices, which exclude food and energy prices, slowed to 2.9% in December from 3.2% in November. Economists had expected core price growth to decelerate to 3%.
Consumer prices rose by 0.2% on a monthly basis in December after edging down by 0.1% in the previous month. Core consumer prices also saw a 0.2% monthly increase in December following a 0.1% uptick in November.
The inflation readings, which are said to be preferred by the Federal Reserve, were included in the Commerce Department's monthly report on personal income and spending.
The report said personal income rose by 0.3% in December after climbing by 0.4% in November.
The Commerce Department also said personal spending advanced by 0.7% in December following an upwardly revised 0.4% increase in November. Economists had expected spending to rise by 0.4% compared to the 0.2% uptick originally reported for the previous month.
The dollar index, which eased to 103.15 in early New York session, recovered to 103.48, limiting its loss to less than 0.1%.
Against the Euro, the dollar weakened to 1.0886 before regaining some lost ground. It was last seen at 1.0853, down marginally from the previous close. Against Pound Sterling, the dollar recovered to 1.2701 after having weakened to 1.2759 a unit of Sterling.
The dollar firmed against the Japanese currency, fetching 148.13 yen a unit. Against the Aussie, the dollar gained marginally, recovering to 0.6578 from 0.6610.
The Swiss franc strengthened to 0.8640 a dollar, gaining nearly 0.4%, while the Loonie firmed to 1.3454 a dollar.
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