The U.S. dollar traded mixed against major currencies Friday. The greenback strengthened against the euro after data showed inflation in euro area dropped more than expected, but weakened versus the yen as worries over emerging markets boosted demand for safe assets.
The euro was on track for its largest monthly decline against the dollar since March 2013. The European Union's statistics office said on Friday consumer prices rose an annual 0.7 percent in January, lower than market forecast of 0.9 percent.
The dollar has been staying strong against the euro since the Federal Reserve Wednesday decided to cut its monthly bond purchases by another 10 billion U.S. dollars starting from February.
The Fed also said it would likely reduce the pace of asset purchases at future meetings if further information supports the Fed expectation of labor market and inflation. Analysts believe the Fed's tightened monetary policy would likely boost the dollar in a long run.
U.S. economic data released on Friday was lackluster. The Commerce Department said U.S. personal consumption expenditures increased by 0.4 percent in December, exceeding market expectations. Meanwhile, U.S. personal income climbed less than 0. 1 percent in December.
The final reading of the Thomson Reuters/University of Michigan consumer sentiment index stood at 81.2 in January, slightly down from 82.5 in the preceding month.
In late New York trading, the euro fell to 1.3488 dollars from 1.3551 dollars of the previous session, and the British pound decreased to 1.6437 dollars from 1.6478 dollars. The Australian dollar dipped to 0.8744 dollar from 0.8785 dollar.
The dollar bought 102.3 Japanese yen, lower than 102.73 yen of the previous session. The dollar moved up to 0.9068 Swiss franc from 0.9034 Swiss franc, and it went down to 1.1128 Canadian dollars from 1.1174 Canadian dollars.