Dollar slightly falls amid fears of continued interest hikes

The US dollar fell on Friday after its largest daily increase since March, which it reached on Thursday, as US consumer price data revived the possibility that the Federal Reserve will have to continue raising interest rates to bring inflation back towards the target level of two percent.

The consumer price index rose 0.4 percent in September, reaching an annual rate of 3.7 percent, as was the case in August. Economists polled by Reuters had expected the consumer price index to rise 0.3 percent on a monthly basis and 3.6 percent on an annual basis.

The dollar index, which measures the performance of the US currency against six major currencies, fell about 0.1 percent to 106.36. On Thursday, it rose 0.8 percent to 106.6, the largest one-day jump since March 15.

The support the dollar received on Thursday led to the yen falling towards the important 150 yen to the dollar level, which it touched briefly last week before rising sharply, leading some to believe that the Japanese authorities were interfering in the exchange market.

The Japanese currency stabilized in the latest trading at 149.69 per dollar.

The euro rose 0.2 percent to $1.0547, while the British pound rose 0.3 percent to $1.2213.

The Swedish krona strengthened against the dollar and euro after consumer price data came in higher than expected, raising the risk that the Swedish central bank may raise interest rates further.

The Australian dollar settled at 0.6324 US dollars. The New Zealand dollar fell 0.1 percent to $0.5920.