The dollar fell against key currencies Friday after the government said its consumer price index rose in February due to higher gas prices. Excluding gas price rises, inflation stayed mild.
The Labor Department said that the consumer price index rose 0.4 percent in February, with gas prices rising 6 percent. Food prices were flat for the first time in 19 months. Excluding food and energy, "core" prices rose just 0.1 percent.
Currency traders interpreted the report to mean that the Federal Reserve won't raise interest rates any time soon.
The central bank has kept interest rates near zero since cutting them during the financial crisis in December 2008 to help boost the economy. Lower interest rates tend to weigh on a currency by reducing the returns investors get from holding it.
The euro rose to $1.3171 in late trading Friday in New York from $1.3097 late Thursday.
In other trading, the British pound rose to $1.5832 from $1.5723. The dollar fell to 83.36 Japanese yen from 83.38 yen, to 0.9158 Swiss franc from 0.9215 Swiss franc.
The dollar rose to 99.16 Canadian cents from 99.13 Canadian cents.