WASHINGTON (dpa-AFX) - The U.S. dollar climbed higher on Thursday after data showing the producer price inflation rose more than expected in November reduced the prospects of the Federal Reserve continuing to lower interest rates next year.
The Labor Department report said the producer price index for final demand climbed by 0.4 percent in November after rising by an upwardly revised 0.3 percent in October.
Economists had expected producer prices to inch up by 0.2 percent, matching the uptick originally reported for the previous month.
The report also said the annual rate of producer price growth accelerated to 3.0 percent in November from an upwardly revised 2.6 percent in October.
The annual rate of producer price growth was expected to rise to 2.6 percent from the 2.4 percent originally reported for the previous month.
While the data is not likely to significantly impact expectations the Federal Reserve will lower interest rates next week, it could reduce the chances the central bank continues to lower rates early next year.
Separate data showed that first-time claims for U.S. unemployment benefits unexpectedly increased in the week ended December 7.
The report said initial jobless claims climbed to 242,000, an increase of 17,000 from the previous week's revised level of 225,000. Economists had expected jobless claims to dip to 220,000 from the 224,000 originally reported for the previous week.
The dollar index climbed to 107.04, gaining more than 0.3%.
Against the Euro, the dollar firmed to 1.0469 from 1.0498 after the European Central Bank cut its benchmark rates by 25 basis points.
The dollar strengthened to 1.2674 against Pound Sterling, firming from 1.2752. Against the Japanese currency, the dollar gained marginally, fetching 152.65 yen a unit.
The dollar recovered from early weakness against the Aussie and was last seen at 0.6369, compared to previous close of 0.6368.
The dollar strengthened against Swiss franc, fetching CHF 0.8923 a unit, gaining from around CHF 0.8840, after the Swiss National Bank lowered interest rates by 50 basis points. Against the Loonie, the dollar firmed to C$1.4220.
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