Dollar broadly higher vs. rivals on Fed taper speculation

The dollar was broadly higher against the other major currencies on Friday, as fresh speculation that the Federal Reserve could begin scaling back its bond-buying program sooner than anticipated strengthened the greenback.

During European morning trade, EUR/USD was down 0.49% at 1.3517.

The euro remained under pressure after on Thursday data showing that euro zone inflation fell to a four year low in October sparked concerns over the risk of further rate cuts by the ECB.

Eurostat said consumer price inflation in the currency bloc rose 0.7% in October, the slowest pace since November 2009, after rising 1.1% in September. 

A separate report showed that the euro zone unemployment rate was at a record high 12.2% in September. 

Meanwhile, the greenback remained supported as a recent series of positive U.S. data added to expectations for the Federal Reserve to begin tapering its stimulus program sooner than expected. 

On Thursday, data showed that manufacturing activity in the Chicago region expanded at the fastest rate in 30 years in October, while a separate report showed that U.S. initial jobless claims fell in line with expectations last week.

The greenback was also higher against the pound, with GBP/USD down 0.27% at 1.5993.

Markit research group said the U.K. manufacturing purchasing managers' index fell to 56.0 in October, from a downwardly revised reading of 56.3 the previous month. Analysts had expected the index to tick down to 56.1 last month. 

The dollar was steady against the yen, with USD/JPY down 0.06% at 98.30, and up against the Swiss franc, with USD/CHF rising 0.37% at 0.9099. 

In Switzerland, data showed that the SVME PMI fell to 54.2 last month, from a reading of 55.3 in September, confounding expectations for a rise to 55.5.

The dollar was steady to lower against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.13% at 1.0417, AUD/USD up 0.12% at 0.9465 and NZD/USD inching down 0.01% at 0.8264. 

Official data earlier showed that producer price inflation in Australia rose 1.3% in the third quarter, exceeding expectations for a 0.7% uptick, after a 0.1% rise in the three months to June. 

In addition, the export-related currencies found support after China's official purchasing managers' index released earlier in the day rose to 51.4 in October, the highest in 18 months, from 51.1 in September. 

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.26% at 80.55. 

Later in the day, the U.S. was to release a report from the Institute of Supply Management on manufacturing activity.