The U.S. dollar gained in late trading on Friday, as U.S. consumer sentiment showed that households expected higher inflation over the next year.
The dollar index, which measures the greenback against six major peers, was up 0.05 percent to 106.6424 in late trading.
The University of Michigan’s gauge of consumer sentiment fell to a preliminary reading of 63 in October from 68.1 in the prior month, hitting the lowest level since May.
According to the report, Americans’ expectations for overall inflation over the next year jumped to 3.8 percent in October from 3.2 percent in the prior month, the highest level since April.
“Assessments of personal finances declined about 15 percent, primarily on a substantial increase in concerns over inflation, and one-year expected business conditions plunged about 19 percent,” said Joanne Hsu, director of UM consumer surveys.
“The stronger U.S. dollar on the back of higher bond yields may be in danger of pricing American exports out of world markets, but it is doing one good thing, which is tamping down the prices of imported goods coming into the country and aiding the Fed’s inflation fight,” said Christopher Rupkey, chief economist at FWDBONDS in New York.
However, Philadelphia Federal Reserve President Patrick Harker said Friday that he thought the central bank can stop raising interest rates.
“I believe that we are at the point where we can hold rates where they are,” Harker said in prepared remarks for the Delaware State Chamber of Commerce.
While in the eurozone, European Central Bank President Christine Lagarde said officials will raise interest rates again if they have to, but they’re also gauging the impact of prior moves still feeding through.
In late New York trading, the euro was down to 1.0511 U.S. dollars from 1.0527 dollars in the previous session, and the British pound fell to 1.2135 U.S. dollars from 1.2174 dollars.
The U.S. dollar bought 149.5050 Japanese yen, lower than 149.8170 Japanese yen of the previous session. The U.S. dollar was down to 0.9012 Swiss francs from 0.9086 Swiss francs, and it fell to 1.3658 Canadian dollars from 1.3692 Canadian dollars. The U.S. dollar rose to 11.0126 Swedish krona from 10.9933 Swedish krona.
