The U.S. dollar hit a more than two-week high against a basket of major currencies on Friday after U.S. inflation data boosted bets on a faster pace of Federal Reserve interest rate increases, while uncertainty ahead of a Bank of Japan (BOJ) meeting limited the dollar's gains against the yen.
The U.S. Labor Department said its Consumer Price Index rose 0.2 percent last month after being unchanged in July. In the 12 months through August, the CPI increased 1.1 percent, up from 0.8 percent in the year through July. The figures beat expectations of economists polled by Reuters.
Traders' expectations of a rate hike from the Fed at its meeting next week rose slightly to 15 percent from 12 percent on Thursday, according to CME Group's FedWatch program. Expectations for a December Fed rate hike rose to more than 56 percent from just over 47 percent on Thursday.