Investing.com - The dollar re-approached four-and-a-half year highs against a basket of other major currencies on Friday, as mounting optimism over the strength of the U.S. economic recovery continued to support and as markets eyed upcoming U.S. retail sales and consumer sentiment data.
The US dollar index, which tracks the performance of the greenback against a basket of six major currencies, was up 0.16% to 87.97, close to four-and-a-half year peaks of 88.31.
EUR/USD slipped 0.11%, hovering near 24-month lows at 1.2462 after data showed that inflation in the euro zone was flat in October, in line with market expectations, after a 0.4% rise in September.
The bloc's annual rate of inflation remained unchanged at 0.4% last month.
Core CPI in the euro zone, which excludes food, energy, alcohol and tobacco, ticked down to an annual rate of 0.7% last month from 0.8% in September.
The data fuelled further concerns over persistently low levels of inflation in the euro area. The European Central Bank targets an inflation rate of close to, but just below 2%.
Meanwhile, a separate report showed that the euro zone's gross domestic product rose 0.2% in the third quarter, more than the expected 0.1% uptick. The bloc's economy expanded at an annual rate of 0.8% in the last quarter, compared to expectations for 0.7% growth.
Earlier Friday, a preliminary report showed that Germany's GDP rose 0.1% in the last quarter, in line with expectations, after a revised 0.1% contraction in the three months to June.
France's economy grew 0.3% in the third quarter, exceeding expectations for growth of 0.1%, after a contraction of 0.1% in the previous quarter.
The dollar touched fresh seven-year highs of 116.40 against the yen, with USD/JPY last up 0.51% at 116.35.
The yen came under broad selling pressure this week amid mounting speculation that Prime Minister Shinzo Abe could call a snap election in December.
A win for Abe would indicate continued support for his for his economic and fiscal policies, which call for a weaker yen.
Meanwhile, GBP/USD fell 0.24% to 1.5673, while USD/CHF edged up 0.11% to 0.9647.
The pound came under pressure after the Office for National Statistics said that U.K. construction output rose 1.8% in September, below expectations for an increase of 3.7%. Construction activity for August was revised to a 3.0% decline from a previously estimated 3.9% drop.
The Australian dollar was lower, with AUD/USD edging down 0.11% to 0.8707. The New Zealand and Canadian dollars were almost unchanged, with NZD/USD at 0.7877 and USD/CAD at 1.1360.