Dollar Climbs Higher, Posts Strong Gains Against Major Counterparts

(RTTNews) - The U.S. dollar surged higher on Friday, reacting to comments from Federal Reserve Chairman Jerome Powell that the central bank's commitment to price stability has been contributing to the confidence in the currency.

Powell said the central bank is acutely focused on returning inflation to 2% goal.

In U.S. economic news today, the Federal Reserve released a report showing industrial production increased by less than expected in the month of May,

The Fed said industrial production crept up by 0.2% in May after surging by an upwardly revised 1.4% in April.

Economists had expected production to rise by 0.4% compared to the 1.1% jump originally reported for the previous month.

A separate report from the Conference Board showed a continued decrease by its reading on leading U.S. economic indicators in the month of May.

The report showed the Conference Board's leading economic index fell by 0.4% in May, matching the revised drop seen in April as well as economist estimates.

The dollar index climbed to 105.09 before paring some gains. It was last seen hovering around 104.65, up nearly 1% from the previous close.

Against the Euro, the dollar firmed to $1.0496 from $1.0550. Eurozone inflation accelerated to a fresh record high in May driven by surging energy prices, final data from Eurostat showed. Inflation rose to 8.1% in May, in line with flash estimate, from 7.4% in April. A year earlier, the rate was 2%.

The dollar is stronger by nearly 1% against Pound Sterling at $1.2229.

The Japanese currency has slid to 134.92 yen a dollar, down more than 2% from Thursday's close. The Bank of Japan today left the policy rate unchanged at -0.10% as expected and reaffirmed that it will purchase a necessary amount of Japanese government bonds (JGBs) without setting an upper limit so that 10-year JGB yields will remain at around zero percent.

The BoJ also retained its forward guidance to purchase 10-year JGBs at 0.25% every business day through fixed-rate purchase operations, unless it is highly likely that no bids will be submitted.

Against the Aussie, the dollar is firmer at 0.6936, gaining from 0.7045.

The Swiss franc has weakened to 0.9702 a dollar, from 0.9664, while the Loonie has dropped to $1.3019 a dollar, losing about 0.5%, after oil prices pared early gains and fell sharply on demand worries.