Investing.com - A better-than-expected U.S. consumer sentiment report sent the dollar firming against most major currencies on Friday, as investors bet the Federal Reserve remains on track to close stimulus programs this month and raise interest rates in 2015.
In U.S. trading on Friday, EUR/USD was down 0.28% at 1.2772.
The Thomson Reuters/University of Michigan preliminary consumer sentiment index rose to a seven-year high 86.4 for October from 84.6 in September. Analysts had expected the index to slip to 84.1 in October, and the surprise firmed the dollar.
Despite hiccups here and there, the U.S. economy is improving, and many investors are betting the Federal Reserve will conclude its monthly bond-buying program this month and raise interest rates in 2015, which should give the dollar support.
Elsewhere, the Census Bureau reported that U.S. building permits rose 1.5% to 1.018 million in September, disappointing expectations for an increase of 2.8% to 1.0.29 million units, after a 5.1% drop to 1.003 million units in August, which capped the greenback's gains.
The report also showed that U.S. housing starts rose 6.3% in September to 1.017 million units, beating expectations for a 4.8% gain. Housing starts for August were revised to a 12.8% fall from a previously estimated 14.4% decline.
Meanwhile, the euro continued to come under pressure amid growing concerns over the threat of deflation in the euro zone after revised data on Thursday showed that bloc's consumer price inflation rose by 0.3% in September, in line with expectations though soft nonetheless.
The rate has now been below 1% for 12 straight months, well under the European Central Bank's target of near but just under 2%.
The dollar was up against the yen, with USD/JPY up 0.33% at 106.69, and up against the Swiss franc, with USD/CHF up 0.33% at 0.9457.
The greenback was down against the pound, with GBP/USD up 0.13% at 1.6110.
The dollar was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.15% at 1.1273, AUD/USD up 0.04% at 0.8760 and NZD/USD down 0.34% at 0.7926.
The loonie saw support after Statistics Canada reported that the country's consumer price index rose 0.1% last month, beating expectations for a flat reading and up from a flat reading in August.
Core consumer price inflation, which excludes the eight most volatile items, increased by 0.2% in September, more than the expected 0.1% rise, after a 0.5% gain the previous month.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.27% at 85.25.