The U.S. dollar held firm on Friday after its biggest daily increase since March the day before, as hot U.S. consumer prices data revived prospects that the Federal Reserve may have to raise rates further to get inflation back towards its 2% target.

The consumer price index (CPI) rose 0.4% in September, keeping the annual rate at 3.7%, the same as in August, while economists polled by Reuters had forecast it would gain 0.3% on the month and 3.6% year-on-year.

The dollar index , which measures the U.S. currency against six of its major peers, ticked up 0.1% to 106.64, its highest level in a week. It rose 0.8% on Thursday, its biggest one-day jump since March 15.

Thursday's boost to the greenback saw the yen head back toward the sensitive 150-line briefly touched last week before strengthening sharply, which led some to believe authorities were intervening in the currency market.

The Japanese currency was last at 149.60 per dollar , keeping traders on guard should the currency weaken further.

The euro was down 0.1% at $1.0517, while sterling was last trading 0.1% lower at $1.2164.

Sweden's crown , edged up against both the dollar and euro after consumer price data came in higher-than-forecast, adding to risks that the Riksbank could raise rates further.

The Australian dollar , which often trades as a proxy for Chinese growth, last sat at $0.6314. The New Zealand dollar eased 0.3% to $0.5910.

Source : Reuters