NEW YORK, Aug 30: The dollar firmed against the euro on Friday, bolstered by rising US inflation that stirred speculation the Federal Reserve will raise interest rates.

The euro was changing hands at $1.4673 down from $1.4708 late Thursday. However, the dollar slipped against the Japanese currency, falling to 108.75 yen from 109.47 yen.

The dollar was boosted by a Commerce Department report showing inflation rose to an annual 4.5pc in July, the highest rate since February 1991.

Elevated inflation could encourage the Fed to raise its key base rate, analysts said. The central bank has held the federal funds rate at a low 2.0pc for two straight policy sessions as it focuses on sluggish economic growth.—AFP