Investing.com - The dollar remained close to its 14-month peak against the other major currencies on Friday, as the release of strong U.S. consumer sentiment and retail sales reports added to expectations for an early hike in U.S. interest rates.
In a preliminary report, the University of Michigan said its consumer sentiment index rose to a 14-month high of 84.6 this month, from a reading of 82.5 in August. Analysts had expected the index to rise to 83.3 in September.
The report came after official data showed that U.S. retail sales rose 0.6% last month, in line with expectations. Retail sales for July were revised to a 0.3% gain from a previously estimated flat reading.
Core retail sales, which excludes automobiles, increased by 0.3% in August, in line with market expectations and growing at the fastest pace since April. July's figure was revised to a 0.3% gain from a previously estimated 0.1% rise.
The positive data added to expectations for an early hike in U.S. interest rates after a study by the San Francisco Federal Reserve published on Monday indicated that central bank officials see rates rising sooner than markets expect.
USD/JPY hit fresh six year highs of 107.40 and was last up 0.23% at 107.35 as the diverging monetary policy stance between the Federal Reserve and the Japanese central bank continued to pressure the yen lower.
Bank of Japan Governor Haruhiko Kuroda said on Thursday that the central bank would be prepared to immediately loosen monetary policy or implement other measures if its 2% inflation target becomes difficult to meet.
The euro held above 14-month lows against the dollar, with EUR/USD up 0.11% at 1.2936 after data showed that euro zone industrial production rose 1.0% in July, exceeding expectations for a 0.5% gain, after a 0.3% fall in June.
But sentiment on the euro remained vulnerable after the European Central Bank unexpectedly cut rates to record lows across the euro zone last week and unveiled new easing measures in a bid to shore up the faltering recovery and boost inflation.
GBP/USD was little changed at 1.6224, after data showed that U.K. construction output was flat in July, compared to expectations for a 0.7% rise, after an increase of 1.2%.
The pound remained mildly supported after a new opinion poll on Scottish independence released on Wednesday showed that support for the no campaign was back in the lead with 53% of voters.
USD/CHF pulled away from one-year highs, slipping 0.09% to 0.9352.
AUD/USD retreated 0.63% to 0.9043 and NZD/USD slid 0.39% to 0.8151 even as data showed that the Business New Zealand Manufacturing Index rose to 56.5 last month, from a reading of 53.5 in July whose figure was revised up from a previously estimated reading of 53.0.
Meanwhile, USD/CAD rose to fresh six-month highs, adding 0.37% to 1.1076.
The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, held steady at 84.46, not far from Tuesday's 14-month peak of 84.65.