1st LD Writethru: U.S. dollar soars on rate hike expectation

The U.S. dollar went up against most major currencies on Friday as the Federal Reserve policy meeting next week spurred market expectation for an earlier interest rates hike this year.

Fed officials will gather next Tuesday in a policy meeting at which it is expected to give more clues about the timing of Fed's first rate hike in almost a decade.

The euro declined against the U.S. dollar to the lowest level since January 2003 amid monetary policy divergence and rising concerns for Greece. The dollar index, which measures the greenback against six major peers, was up 0.86 percent at 100.29 in late trading.

On the economic front, U.S. consumer sentiment decreased to a four-month low in March. The Thomson Reuters/University of Michigan's preliminary consumer sentiment index fell from 95.4 in February to 91.2 in March, well below market consensus of 96.0.

Moreover, the Producer Price Index for final demand fell 0.5 percent in February on a seasonally adjusted basis, missing estimates of a 0.3-percent gain, the U.S. Labor Department reported Friday. Final demand prices moved down 0.8 percent in January and 0.2 percent in December.

In late New York trading, the euro dropped to 1.0475 dollars from 1.0603 dollars in the previous session, and the British pound slipped to 1.4726 dollars from 1.4854 dollars. The Australian dollar went down to 0.7620 dollars from 0.7685 dollars.

The U.S. dollar bought 121.33 Japanese yen, lower than 121.36 yen of the previous session. The U.S. dollar edged up to 1.0067 Swiss francs from 1.0058 Swiss francs, and it rose to 1.2802 Canadian dollars from 1.2710 Canadian dollars. Endite