U.S. Dollar Higher Following Strong PCE Inflation Data

The U.S. dollar moved up against its major counterparts in the New York session on Friday, as the Federal Reserve's preferred measure of inflation, the personal consumption expenditures price index, exceeded expectations on an annual basis in March.

Data from the Commerce Department showed that the annual rate of consumer price growth accelerated to 2.7 percent in March from 2.5 percent in February. Economists had expected the pace of growth to tick up to 2.6 percent.

The annual rate of growth by core consumer prices in March came in unchanged from February at 2.8 percent, while economists had expected the pace of growth to slow to 2.6 percent.

On a monthly basis, the consumer price index rose by 0.3 percent in March, matching the increase seen in February as well as economist estimates.

Excluding food and energy prices, core consumer prices also climbed by 0.3 percent for the second straight month, in line with expectations.

The data reinforced hopes that the central bank will be cutting interest rates by September.

The greenback jumped to a 3-day high of 1.0673 against the euro, 2-day high of 1.2449 against the pound and a 34-year high of 157.59 against the yen, from an early fresh 2-week low of 1.0752, 2-week low of 1.2540 and a 2-day low of 154.95, respectively. The greenback is likely to find resistance around 1.05 against the euro, 1.22 against the pound and 160.00 against the yen.

The greenback recovered to 1.3695 against the loonie and 0.6517 against the aussie, off its early more than 2-week lows of 1.3632 and 0.6554, respectively. The greenback is seen finding resistance around 1.39 against the loonie and 0.63 against the aussie.

The greenback moved up to 0.9150 against the franc, from an early 3-day low of 0.9095. If the currency rises further, it may find resistance around the 0.93 level.

The greenback advanced to 0.5929 against the kiwi, reversing from an early low of 0.5969. The greenback is poised to challenge resistance around the 0.58 level.