U.S. dollar rallies on upbeat inflation data

The U.S. dollar increased against other major currencies on Friday as key inflation data from the country came out better than expected.

The Consumer Price Index (CPI) for all urban consumers increased 0.2 percent in August on a seasonally adjusted basis, beating market consensus of 0.1 percent, the U.S. Labor Department reported Friday.

Over the last 12 months, the all items index rose 1.1 percent before seasonal adjustment.

The index for all items less food and energy increased 0.3 percent in August, following a 0.1-percent increase in July.

Analysts said although the inflation data was not enough to convince investors that the Federal Reserve could raise interest rates as early as this month; it boosted market expectation of a December-hike.

The dollar index, which measures the greenback against six major currencies, was up 0.84 percent at 96.088 in late trading, the highest in nearly two weeks.

In late New York trading, the euro fell to 1.1152 dollars from 1.1243 dollars of the previous session, and the British pound decreased to 1.3016 dollars from 1.3237 dollars. The Australian dollar dipped to 0.7482 dollars from 0.7513 dollars.

The dollar bought 102.43 Japanese yen, higher than 102.12 yen in the previous session. The dollar rose to 0.9811 Swiss francs from 0.9714 Swiss francs, and it inched up to 1.3215 Canadian dollars from 1.3149 Canadian dollars. Enditem