Dollar firms ahead of inflation data, yuan sails higher

Shafaq News / The dollar strengthened further on Friday following its rise from more than four-month lows in recent sessions, as investors waited for U.S. inflation data to set the currency's direction, Reuters reported.

The U.S. dollar index picked up in the late Asian and early European session, trading up 0.1% on the day at 90.78 at 0740 GMT.

The United States and Britain have a public holiday on Monday, meaning the dollar's gains could be attributed to month-end demand.

Versus the yen, the dollar was near a seven-week high. The pair changed hands at 109.875, a move which prompted analysts to note Japan's rise in unemployment, fall in consumer prices and news that the government is considering extending a state of emergency over the COVID-19 pandemic.

The euro was down 0.1% at $1.21875, hovering below its recent high of $1.2266, as dovish comments from European Central Bank officials sapped its momentum ahead of the policy meeting on June 10.

The New Zealand dollar, which earlier in the week jumped on the prospect of an interest rate hike by September 2022, was down 0.6% at 0.7247.

The Australian dollar was down 0.3% at 0.7722.

China’s onshore yuan hit a new three-year high, on track for its best week since November.

Chinese regulators said late on Thursday that they will crack down on manipulation of the forex market while reiterating no change to the country's currency policy.

The British pound was down 0.2% at around $1.41835, on track for its best month versus the dollar so far this year.

A Bank of England policymaker said on Thursday that the central bank could raise interest rates as soon as the first half of next year, but is more likely to wait until later in 2022.

The number of Americans filing new claims for unemployment benefits dropped more than expected last week, data on Thursday showed.

Core personal consumption expenditures data -- an inflation report closely watched by U.S. central bankers -- is due at 1230 GMT.

U.S. President Joe Biden is set to release his first full budget since taking office in January later in the session. The New York Times reported on Thursday that Biden will seek $6 trillion in federal spending for the 2022 fiscal year.