Dollar turns broadly higher amid Fed taper expectations

Chicago (Dec 14)  The dollar turned broadly higher against the other major currencies on Friday, as investors turned to the Federal Reserve's last meeting of the year amid growing expectations for the central bank to soon begin tapering its stimulus program.

During U.S. morning trade, EUR/USD edged down 0.16% to 1.3731.

Official data showed that U.S. producer price inflation fell 0.1% last month, in line with expectations, after a 0.2% decline in October.

Core producer price inflation, which excludes food and energy, rose 0.1% in November, as expected, after a 0.2% increase the previous month.

The data did little to alter expectations that the Fed could begin tapering its USD85 billion a month asset purchase program at its policy meeting scheduled for December 17-18.

Meanwhile, demand for the euro remained mildy supported as expectations for further monetary easing by the European Central Bank dimmed after the bank left monetary policy unchanged at its meeting this month, following a surprise rate cut in November.

The pound was lower against the dollar, with GBP/USD down 0.45% to 1.6276.

Elsewhere, the greenback was lower against the yen, with USD/JPY down 0.21% to 103.16 and higher against the Swiss franc, with USD/CHF adding 0.12% to 0.8903.

In Switzerland, official data earlier showed that producer price inflation fell 0.1% in November, less than the expected 0.2% decline, after a 0.4% drop the previous month.

On a yearly basis, Swiss producer price inflation fell 0.4% last month, compared to expectations for a 0.5% decline.

The greenback was steady to higher against the Australian, New Zealand and Canadian dollars, with AUD/USD down 0.04% to 0.8934, NZD/USD shedding 0.31% to 0.8224 and USD/CAD up 0.04% to 1.0643.

The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.13% to 80.28.