WASHINGTON (dpa-AFX) - The dollar rallied to its highest in almost a year versus the euro on Friday, capping its best month since last September.
A slew of disappointing data from the euro zone has heightened expectations that the European Central Bank will offer stimulus next year.
Any hope that the region's economic engine Germany will bring the euro zone back to life were dashed this week. German retail sales declined unexpectedly in July from June, while unemployment increased in August as worsening economic activity weighed on job creation.
And today, data showed annual inflation rate in the euro zone fell further in August, prompting calls for the ECB to take more aggressive steps.
The U.S. has its own issues, including an unexpected drop in consumer spending in July, but this week's figures showing robust 4.2 percent second quarter growth has markets thinking the Federal Reserve may hike interest rates ahead of schedule.
The dollar rose to $1.3140 against the euro, its highest since September 2013.
The buck held near its best in four months against the sterling, improving to $1.6580 from above $1.66.
The dollar also firmed near a 6-month high against the yen, bouncing back above Y104 in quiet dealing.
In economic news from the U.S., consumers spent less in July than in the previous month, a surprise retreat that complicates the prevailing belief that the U.S. economic situation is improving.
Statistics issued by the U.S. Commerce Department showed that personal spending declined 0.1 percent in July. That followed an increase of 0.4 percent in the previous month. Economists had expected the figure to rise by 0.2 percent.
Manufacturing activity in the Chicago-area rebounded in August, as factories reported increases in new orders.
The headline index of the Chicago Purchasing Managers report, an important gauge of manufacturing in the Midwest, jumped to 64.3 in August from July's 52.6.
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