The dollar rose on Friday, on track for its largest weekly gain in more than seven months against the euro, after strong US retail sales and producer prices data for September reinforced expectations the Federal Reserve would raise interest rates in December. The safe-haven yen and Swiss franc fell versus the dollar after risk sentiment got a boost from Chinese data showing producer prices rose for the first time in nearly five years. That boded well for the global economy which has been battling the threat of deflation in recent months.
The dollar index, which tracks the greenback against a basket of six major currencies, added 0.3 percent to 97.788. It was up 1.2 percent for the week and 2.4 percent for the month so far. The US retail sales data, which showed a 0.6 percent rise last month after declining 0.2 percent in August, supported the dollar's gains. Other data on Friday suggested a pickup in inflation, with producer prices rising broadly last month to record their biggest year-on-year increase since December 2014. "Following a disappointing August, Fed Chair Janet Yellen will be pleased to see retail sales rebound strongly in September," said Dennis de Jong, managing director at UFX.com in Limassol, Cyprus. Against the yen, the dollar rose 0.5 percent to 104.28. It was up 1.2 percent for the week. The euro fell 0.4 percent to $1.1015, heading back toward its Thursday's low of $1.0982, its weakest level since late July. It was down 1.6 percent for the week, its worst weekly performance since late February.
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