(Adds comment, ECI data, freshens prices)
The dollar consolidated gains on Friday and was on track for its biggest weekly rise in seven months against other major currencies as markets priced a year ahead of aggressive hikes in U.S. interest rates.
Money markets priced in a 28.5-bps-rate hike in March and as many as 119.5 bps in cumulative increases by year's end as the dollar stayed in the limelight after a week highlighted by a hawkish Federal Reserve meeting. IRPR
The dollar index =USD edged up 0.01% to 97.232, with the euro EUR= also barely up 0.05% at $1.1149.
"I look for some consolidation, but nothing to say that the dollar's up move is over," said Marc Chandler, chief market strategist at Bannockburn Global Forex.
U.S. labor costs increased strongly in the fourth quarter, but less than expected. The Employment Cost Index, the broadest measure of labor costs, rose 1.0% after increasing 1.3% in the July-September period, the Labor Department said.
Economists polled by Reuters had forecast a 1.2% advance in the ECI, widely viewed as one of the better measures of labor market slack and a predictor of core inflation.
"The employment cost index, which (Fed Chair Jerome) Powell has referred to specifically, was a bit softer than expected and has spurned some position adjusting ahead of the weekend," Chandler said.
U.S. Treasury yields steadied, with 10-year yields US10YT=RR trading little changed and well below two-year highs of nearly 1.9% they hit on Monday.
The two-year US2YT=RR Treasury yield, which often moves in step with rate expectations, slid 1.8 basis points to 1.174%, but was still almost 4.7 basis points higher for the week.
The euro EUR=EBS nursed losses on Friday with the single currency creeping marginally higher from Thursday's 20-month low of $1.1131.
Major currencies drifted sideways in Asian trading before Chinese New Year holidays next week even though U.S. yields were marginally higher.
Data has also been supportive of the greenback with the U.S. economy registering its best annual growth in nearly four decades.
The yen JPY= edged up 0.06% at 115.30 per dollar, while the Australian and New Zealand dollars languished - the kiwi NZD=D3 dipping slightly to a fresh 15-month low of $0.6570.
For the week so far, the dollar index has gained about 1.7% and about the same against the euro, nearly 2% on the Antipodeans. The U.S. dollar index =USD has shot above 97 for the first time since July 2020.
Sterling GBP=D3 was pushed to a one-month low of $1.3385 on Thursday but has bounced back to $1.3409 as traders await the Bank of England's meeting next week. Rates markets have priced a 90% chance of a hike. BOEWATCH
======================================================== Currency bid prices at 10:33AM (1533 GMT)Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Dollar index =USD 97.2860 97.2260 +0.07% 1.697% +97.4410 +97.0660 Euro/Dollar EUR=EBS $1.1141 $1.1144 -0.03% -2.00% +$1.1174 +$1.1122 Dollar/Yen JPY=EBS 115.3700 115.3650 +0.02% +0.23% +115.6800 +115.1600 Euro/Yen EURJPY= 128.53 128.55 -0.02% -1.37% +128.8500 +128.4700 Dollar/Swiss CHF=EBS 0.9318 0.9310 +0.10% +2.17% +0.9329 +0.9291 Sterling/Dollar GBP=D3 $1.3400 $1.3380 +0.17% -0.89% +$1.3431 +$1.3366 Dollar/Canadian CAD=D3 1.2777 1.2740 +0.31% +1.07% +1.2796 +1.2713 Aussie/Dollar AUD=D3 $0.6984 $0.7034 -0.69% -3.91% +$0.7046 +$0.6968 Euro/Swiss EURCHF= 1.0380 1.0375 +0.05% +0.11% +1.0391 +1.0360 Euro/Sterling EURGBP= 0.8311 0.8323 -0.14% -1.06% +0.8331 +0.8306 NZ NZD=D3 $0.6546 $0.6582 -0.53% -4.35% +$0.6589 +$0.6533 Dollar/DollarDollar/Norway NOK=D3 9.0050 8.9605 +0.57% +2.29% +9.0210 +8.9375 Euro/Norway EURNOK= 10.0332 9.9641 +0.69% +0.22% +10.0840 +9.9557 Dollar/Sweden SEK= 9.4593 9.3791 +0.76% +4.89% +9.4800 +9.3706 Euro/Sweden EURSEK= 10.5400 10.4609 +0.76% +2.99% +10.5548 +10.4511 <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ World FX rates https://tmsnrt.rs/2RBWI5EDollar stands tall after Fed's hawkish pivot https://tmsnrt.rs/3AGi4WR
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