Investing.com - The dollar erased losses against a basket of other major currencies on Friday, after relatively positive U.S. inflation data and as investors awaited comments by Federal Reserve Chair Janet Yellen later in the day.
In a report, the Department of Labor said that the U.S. consumer price index rose 0.1% in April, in line with expectations and after a 0.2% gain the previous month.
Year-on-year, consumer prices slipped 0.2% last month however, compared to expectations for a 0.1% downtick, following a 0.1% fall in March.
The core consumer price index, which excludes food and energy, rose 0.3% in April, exceeding expectations for a 0.2% increase, after a 0.2% gain the previous month.
The report came after a string of downbeat U.S. data on Thursday had fuelled fresh uncertainty over the strength of the economy.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.25% to 95.71, off session lows of 94.89.
EUR/USD was steady at 1.1114, down from highs of 1.1208 hit earlier in the session.
The single currency found support earlier, after the Ifo Institute said that its German business climate index ticked down to 108.5 this month from 108.6 in April, compared to expectations for a decline to 108.3.
The euro also strengthened after European Central Bank President Mario Draghi said at a conference in Portugal that the ECB's policies have helped the euro zone's economy to recover.
"The economic outlook for the euro area is brighter today than it has been for seven long years. Monetary policy is working its way through the economy. Growth is picking up. And inflation expectations have recovered from their trough," he said.
The pound turned lower, with GBP/USD down 0.41% to 1.5593.
The U.K. Office for National Statistics earlier reported that public sector net borrowing rose by £6.04 billion in April, compared to expectations for an increase of £7.80 billion.
Elsewhere, the dollar turned higher against the yen and the Swiss franc, with USD/JPY up 0.30% to 121.40 and with USD/CHF rising 0.22% to 0.9390.
At its monthly policy meeting on Friday, the Bank of Japan kept its monetary policy on hold and signaled growing confidence in the strength of the economy.
The Australian and New Zealand dollars were weaker, with AUD/USD down 0.75% to 0.7835 and NZD/USD sliding 0.40% to 0.7319.
Meanwhile, USD/CAD climbed 0.56% to trade at 1.2269 after Statistics Canada reported that retail sales increased by 0.7% in March, beating expectations for a 0.3% rise. Core retail sales, which exclude automobiles, rose 0.5% in March, compared to expectations for a 0.4% uptick.
A separate report showed that Canada's consumer prices slipped 0.1% in April, confounding expectations for a 0.1% rise.
Year-on-year, consumer prices gained 0.8% last month, disappointing expectations for an increase of 1.0%.