2016.09.1609:28:00UTC+00Dollar Advances As Strong U.S. Strong Inflation Data Renews Fed Rate Hike Hopes

The U.S. dollar climbed against its major counterparts in European deals on Friday, after data showed that U.S. consumer prices climbed more-than-expected in August, suggesting that the Federal Reserve is likely to tighten monetary policy in coming months.

The Labor Department said its consumer price index rose by 0.2 percent in August after coming in unchanged in July. Economists had expected prices to inch up by 0.1 percent.

Excluding food and energy prices, core consumer prices climbed by 0.3 percent in August after edging up by 0.1 percent in July. Core prices had been expected to rise by 0.2 percent.

Traders now focus on the University of Michigan's preliminary report on consumer sentiment in the month of September, due at 10:00 am ET.

The University of Michigan's consumer sentiment index is expected to inch up to 90.8 in September from 89.8 in August.

The Federal Reserve policy makers will meet next week to gauge the possibility of raising short-term interest rates against the backdrop of uneven economic growth.

Thursday's weak data on retail sales and industrial production fueled worries over the economic growth outlook and added to speculation that the Fed may refrain from raising rates at next week's meeting.

The greenback showed mixed performance in the Asian session. While the greenback declined against the yen, it held steady against the rest of major counterparts.

The greenback appreciated to a 10-day high of 1.1195 against the euro, up by 0.4 percent from Thursday's closing value of 1.1242. If the greenback extends rise, 1.10 is possibly seen as its next resistance level.

Data from Eurostat showed that Eurozone hourly labor cost grew at a slower pace in the second quarter.

Hourly labor costs increased 1 percent year-on-year, slower than the 1.6 percent growth registered a quarter ago.

The greenback climbed to 0.9765 against the Swiss franc, after having fallen to 0.9711 at 10:00 pm ET. The greenback is seen finding resistance around the 0.99 mark.

The greenback rebounded to 102.17 against the Japanese yen, off its early 3-day low of 101.74. Continuation of the greenback's uptrend may see it challenging resistance around the 104.00 area.

The greenback spiked up to 1.3129 against the pound, its strongest since September 1. This marks a 0.9 percent appreciation from a low of 1.3247 hit at 6:45 pm ET. The next possible resistance for the greenback may be found around the 1.30 zone.

The greenback reversed from early multi-day lows of 0.7331 against the kiwi and 0.7527 against the aussie and was trading higher at 0.7279 and 0.7486, respectively. On the upside, 0.71 and 0.73 are likely seen as the next resistance levels for the greenback against the kiwi and the aussie, respectively.

The greenback strengthened to 1.3241 against the loonie, a level unseen since July 27. At Thursday's close, the pair was valued at 1.3159. If the greenback extends rise, it may locate resistance around the 1.34 mark.