The dollar took a breather on the final day of a rough week, holding its ground against the yen while paring some recent losses against its European counterparts.
A flurry of inflation data from both sides of Atlantic signaled prices remain in check, giving central bankers the green light to keep accommodative monetary policy in place.
Overall US consumer prices increased 0.3% from last month. This is identical to July’s increase.
However, the Department of Labor said US consumer prices stripping out volatile food and energy prices were flat compared to the previous month.
On an annual basis, total consumer prices in August were up 1.1 percent — the lowest since 1961.
Meanwhile, the Reuters/University of Michigan index of consumer sentiment slipped to 66.6 in September from a reading of 68.9 in August, while economists had expected the index to increase to a reading of 70.0.
The buck was been pressured for most of the week amid talk of the Federal Reserve ramping up its quantitative easing program.
On Friday, the dollar improved a bit versus the euro, picking up a penny to 1.3040. Yesterday, the dollar hit a monthly low of 1.3159.
German producer prices were flat in August compared to the month before, and up only 3.2 percent from a year ago. Economists expected yearly inflation of 3.5 percent.
Against the sterling, the dollar firmed to 1.5620 from a monthly low of 1.5728.
The was practically no movement in the dollar/yen pair, which held near Y85 all day.
The dollar rose sharply from a 15-year low 82.81 on Wednesday, after Japanese officials conducted an unusual intervention in the currency markets in hopes of stemming the yen’s rapid rise.