The dollar slid against the euro Friday after U.S. data showed easing inflation, but it reached a fresh high against the yen as chances diminished for an interest rate hike in Japan, according to AP. The euro rose to $1.3378 in late New York trading from $1.3307 the day before. The dollar climbed to 123.46 yen from 122.97 yen after the Bank of Japan left its benchmark lending rate unchanged at 0.5 percent and suggested a July rate hike was unlikely. On Thursday, the dollar broke through its December 2002 high of 123.13 yen ahead of the expected rate decision. Higher interest rates, a weapon against inflation, can strengthen a currency by making investments denominated in it more attractive. The British pound rose to $1.9751 from $1.9694 late Thursday. The dollar weakened after the U.S. Labor Department reported that its Consumer Price Index shot up in May at the fastest pace in 20 months, while gas prices jumped. The closely watched core CPI, however _ which excludes often volatile food and energy prices _ rose 0.1 percent, below the expected 0.2 percent increase. The reading eased concerns about an interest rate hike, fueled last week when the benchmark 10-year Treasury note passed 5 percent for the first time since last summer. The bond yield fell to 5.16 percent Friday from 5.23 percent late Thursday. Meanwhile, the U.S. Federal Reserve reported that industrial production was flat in May, after a 0.4 percent surge in April. In other economic news, the U.S. Commerce Department said that the current account deficit, the broadest measure of foreign trade, increased to $192.6 billion (¤144.66 billion) in the January-to-March period from $187.9 billion (¤141.13 billion) in the fourth quarter _ slightly below what analysts expected. Also Friday, the dollar bought 1.0685 Canadian dollars, barely changed from 1.0684, and 1.2428 Swiss francs, down from 1.2468.
