The U.S. dollar strengthened against its major opponents in the European session on Friday, ahead of the U.S. inflation data that is expected to put pressure on policymakers to raise the interest rate at a faster pace.

The CPI is expected to increase to 6.8 percent year-on-year in November from 6.2 percent in October.

Economists forecast an increase of 0.7 percent month-on-month in November, after a 0.9 percent rise in the previous month.

A strong reading could force policymakers to lift interest rate quicker than expected.

The Fed meeting is also in focus, as an acceleration in the pace of tapering of asset purchases will be put into a discussion.

Money markets are currently pricing in a quarter point rate increase in June.

The greenback climbed to 2-day highs of 1.1265 against the euro and 0.6770 against the kiwi, off its early lows of 1.1303 and 0.6807, respectively. The greenback is seen locating resistance around 1.10 against the euro and 0.66 against the kiwi.

The greenback reversed from its prior lows of 0.9229 against the franc and 113.33 against the yen and a 2-day low of 1.3233 against the pound and was trading up at 0.9253, 113.79 and 1.3187, respectively. The greenback is seen facing resistance around 0.94 against the franc, 116.00 against the yen and 1.30 against the pound.

In contrast, the greenback retreated to 0.7158 against the aussie and 1.2697 against the loonie, following its previous 2-day high of 0.7132 and a 3-day high of 1.2723, respectively. The currency is poised to test support around 0.74 against the aussie and 1.25 against the loonie.

University of Michigan's preliminary consumer sentiment index for December, inflation data and monthly budget statement for November will be out in the New York session.

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