WASHINGTON (dpa-AFX) - The U.S. dollar gained some ground against its major counterparts on Friday, but retreated a bit subsequently, as traders looked ahead to the release of the crucial U.S. inflation data, due early next week, for more clues about the outlook for Federal Reserve's interest rate trajectory.
U.S. consumer and producer price inflation data due next week are now pivotal for the Federal Reserve's higher-for-longer rate strategy.
The consumer price index is forecast to rise 0.3% on the month and 3.4% annually, down from 0.4% and 3.5%, respectively in March.
Federal-funds futures currently show traders expect the Fed to start lowering its benchmark interest rate in November though there remains a chance of a cut in September.
In economic news today, a report released by the University of Michigan showed a substantial deterioration in U.S. consumer sentiment in the month of May.
The University of Michigan said its consumer sentiment index plunged to 67.4 in May from 77.2 in April. Economists had expected the index to edge down to 76.0.
With the much steeper than expected drop, the consumer sentiment index tumbled to its lowest level since hitting 61.3 last November.
The dollar index, which dropped to 105.14 around mid-morning, quickly rebounded to 105.40, but turned a bit sluggish past noon. The index was last seen at 105.33, up nearly 0.1% from the previous close.
Against the Euro, the dollar firmed to 1.0769 from 1.0783. The dollar was roughly flat at 1.2525 against Pound Sterling, after having firmed to 1.2502 earlier in the day.
Against the Japanese currency, the dollar strengthened to 155.80 yen. The dollar firmed to 0.6603 a unit of the Aussie, from 0.6621. The dollar was a bit weak against Swiss franc at CHF 0.9049, and against the Loonie, it was slightly weak a little while ago, at C$1.3672.
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