Investing.com - The dollar held onto gains against the other major currencies on Friday, hovering close to a seven-month peak despite the release of downbeat U.S. consumer sentiment data, as expectations for a 2016 rate hike continued to support.
EUR/USD dropped 0.38% to 1.1016, close to Thursday’s more than two-month trough of 1.0981.
In a preliminary report, the University of Michigan said its consumer sentiment index fell to 87.9 in October from 91.2 the previous month, disappointing expectations for a rise to 91.9.
The data came after another report showed that U.S. retail sales rose 0.6% in September, in line with expectations and after a revised 0.2% fall the previous month.
Core retail sales, which exclude automobiles, increased by 0.5% last month, beating expectations for a 0.4% gain.
In addition, the U.S. producer price index rose 0.3% in September, compared to expectations for an increase of 0.2%.
Core PPI, which excludes food and energy, ticked up 0.2% last month, exceeding expectations for a 0.1% rise.
The greenback was already broadly supported by the minutes of the Federal Reserve’s September policy meeting released on Wednesday showing that several voting members of the policy committee judged a rate hike would be warranted "relatively soon" if the U.S. economy continued to strengthen.
USD/JPY advanced 0.60% to trade at 104.33, re-approaching Thursday’s more than two-month peak of 104.63.
Demand for the safe-haven yen weakened after data earlier showed that China’s consumer price index rose 0.7% in September, beating expectations for an uptick of 0.3%. Year-on-year, consumer prices increased 1.9% last month, compared to expectations for a 1.6% gain.
The positive report eased concerns over global economic growth after data on Thursday showed that China’s trade surplus narrowed to $41.99 billion in September from $52.05 billion the previous month. Analysts had expected the trade surplus to widen to $53.00 billion last month.
GBP/USD slid 0.28% to 1.2222, while USD/CHF added 0.14% to 0.9875.
The Australian and New Zealand dollars were stronger, with AUD/USD up 0.94% at 0.7639 and with NZD/USD edging up 0.13% to 0.7106.
Meanwhile, USD/CAD declined 0.42% to 1.3136.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.27% at 97.79, just off Thursday’s seven-month high of 98.12.