Singapore: The US dollar held on to the previous session's gains on Friday after stronger-than-expected inflation data prompted traders to scale back expectations for interest rate cuts by the Federal Reserve.

The euro and sterling were steady against the dollar after falling 0.5% and 0.3% on Thursday, respectively, while the Japanese yen rose 0.3% to 147.395 following stronger-than-expected second-quarter GDP data.

US producer prices in July posted their fastest increase in three years, driven by a surge in the costs of goods and services, signaling a broad pickup in inflationary pressures that analysts say could pose a dilemma for the Fed.

The hotter-than-expected producer price inflation came after a more moderate consumer inflation reading earlier in the week, which had boosted expectations of policy easing in the world's largest economy and lifted risk assets across the board.

Following the producer price report, odds of a 25-basis-point rate cut by the US central bank retreated slightly, according to analysts.

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