Dollar slips

TOKYO: The dollar dipped on Friday after weaker-than-expected U.S. inflation data, with the currency already sagging on signs of reduced trade tensions between the United States and China.

Emerging currencies, like the South African rand and the Mexican peso, held onto to gains having surged, as investors in emerging markets registered relief that Turkey´s central bank had hiked its policy rate to 24 percent to restore confidence in the lira. The greenback took a hit overnight after the U.S. consumer price index (CPI), the government´s broadest inflation gauge, rose just 0.2 percent in August and less than the 0.3 percent projected by analysts in a Reuters poll.

"The dollar has sagged mainly due to the soft U.S. CPI," said Masafumi Yamamoto, chief forex strategist at Mizuho Securities in Tokyo.

The dollar´s index against a basket of six major currencies was a shade lower at 94.491 after slipping 0.3 percent on Thursday, when it touched 94.428, its lowest since Aug. 31.The euro inched up 0.05 percent to $1.1695 after gaining more than 0.5 percent overnight when it brushed a two-week high of $1.1701. The ECB kept policy unchanged as expected on Thursday, staying on track to end its bond purchases this year and raise interest rates next autumn.