Dollar Loses Against Rivals Amid Signs Of Cooling Inflation

The U.S. dollar turned in a sluggish performance on Friday, extending recent weakness, amid easing concerns about interest rate hikes, and data showing a slowdown in the pace of consumer price growth in the month of April.

The Commerce Department's report showed the rate of core consumer price growth slowed to 4.9% in April from 5.2% in March, raising optimism that the Fed will slow the pace of monetary policy tightening in the second half of the year.

The report showed personal income rose by 0.4% in April after climbing by 0.5% in March. Economists had been expecting another 0.5% increase. Personal spending advanced by 0.9% in April after surging by an upwardly revised 1.4% in March, as against expectations for a 0.7% increase.

A separate report from the University of Michigan showed consumer sentiment in the U.S. deteriorated by even more than previously estimated in the month of May.

The report showed the consumer sentiment index for May was downwardly revised to 58.4 from the preliminary reading of 59.1. Economists had expected the index to be unrevised.

The consumer sentiment index is even further below the April reading of 65.2, slumping to its lowest level since hitting 55.8 in August of 2011.

The dollar index dropped to around 101.50 by mid-morning, and despite recovering to 101.94 subsequently, retreated again and was last seen at 101.67, down 0.16% from the previous close.

Against the Euro, the dollar firmed to $1.0698 before paring gains and easing to $1.0730, its previous closing level.

The dollar is trading at $1.2630 against Pound Sterling, weakening from $1.2607.

Against the Japanese currency, the dollar is little changed at 127.11 yen. Against the Aussie, the dollar is trading at 0.7159, after having closed at 0.7099 on Thursday.'

The Swiss franc is stronger at 0.9575 a dollar, gaining from 0.9589. The Loonie has firmed to 1.2721 a dollar from 1.2771 thanks to higher crude oil prices.

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