The dollar firmed against the euro in late-trading here Friday as investors pondered the impact of US inflation data and decided to close out positions ahead of a three-day week end in New York and London.
The single European currency in late trade was at 1.2739 dollars against 1.2804 late Thursday in New York.
The dollar was meanwhile trading at 112.59 yen after 111.68 on Thursday.
In Washington the US Commerce Department reported that inflation in April came to 0.5 percent from March, or 2.9 percent for the year.
The core rate, which excludes food and energy, rose 0.2 percent, or an annual 2.1 percent.
Ananlysts at Gain Capital said the results were slightly negative for the dollar, as they suggested that US inflation was well contained.
But for Dean Maki, an economist with Barclays Capital, an annual inflation reading above 2.0 percent could induce Federal Reserve policymakers to raise interest rates when they convene next month.
Most currency watchers hold that any dollar rally is likely to prove temporary, given the market's mounting concerns over the US current account deficit -- now about 6.0 percent of gross domestic product -- and expectations of a narrowing in the yield differential between the US and its major competitors.
The US currency has fallen heavily over the past month or so amid growing concern about global economic imbalances and speculation that US interest rates are near a peak at 5.00 percent.
Adding to the pressure have been signs of reserve diversification by world central banks.
