1st LD Writethru: U.S. dollar climbs on inflation data

The U.S. dollar went up against most major currencies on Friday as the rising inflation data from the country showed the economy was moving closer to the Federal Reserve's inflation target, raising speculation that the Fed would lift interest rates earlier than expected.

U.S. Labor Department said Friday that Consumer Price Index ( CPI), a main gauge of inflation, increased 0.3 percent in March on a seasonally adjusted basis. The core CPI, which excludes the volatile food and energy categories, rose 0.2 percent last month, the same increase as in January and February.

The Fed stressed in its recent monetary policy meetings that it will be appropriate to raise the rate when there has been further improvement in the labor market and that inflation will move back to its 2 percent objective over the medium term.

Analysts said the upward growth momentum of CPI might offer confidence for the Fed to hike up interest rates sooner this year.

The greenback was further supported by the strong U.S. consumer sentiment data. The Thomson Reuters/University of Michigan's consumer sentiment index for the mid-month April registered 95.9, higher than the final March reading of 93.0.

In late New York trading, the euro dropped to 1.0794 dollars from 1.0799 dollars in the previous session, and the British pound was flat at 1.4961 dollars. The Australian dollar went down to 0. 7778 dollars from 0.7815 dollars.

The U.S. dollar bought 118.77 Japanese yen, lower than 118.85 yen of the previous session. The U.S. dollar increased to 0.9528 Swiss francs from 0.9550 Swiss francs, and it rose to 1.2241 Canadian dollars from 1.2167 Canadian dollars. Endite