(Updates prices, adds comments from Fed chair and analyst)
* Fed's Yellen expresses concerns about U.S. economy
* U.S. retail sales post healthy gains
* Expectations of December Fed hike lift greenback
* China inflation numbers see yen under pressure
By Gertrude Chavez-Dreyfuss
NEW YORK, Oct 14 The dollar on Friday posted its
best weekly performance in more than seven months after strong
U.S. retail sales and producer prices data for September
reinforced expectations the Federal Reserve would raise interest
rates in December.
The U.S. currency briefly trimmed gains versus the Japanese
yen and euro after Fed Chair Janet Yellen said the U.S. central
bank might need to run a "high-pressure" economy to reverse
damage from the last financial crisis.
Her view of the economy did not alter expectations for a
December rate hike, analysts said.
"Yellen's comments were more about the Fed looking down the
road, and her concerns about the last financial crisis shed
light on why the Fed has been so hesitant to raise interest
rates," said Joe Manimbo, senior market analyst at Western Union
Business Solutions in Washington.
The dollar index, which tracks the greenback against a
basket of six major currencies, rose 0.4 percent to 97.935
. It was up 1.4 percent for the week and 2.5 percent for
the month so far.
The safe-haven yen and Swiss franc fell versus
the dollar after risk sentiment got a boost from Chinese data
showing producer prices rose for the first time in nearly five
years. That boded well for the global economy which has been
battling the threat of deflation in recent months.
The U.S. retail sales data, which showed a 0.6 percent rise
last month after declining 0.2 percent in August, supported the
dollar's gains. Other data on Friday suggested a pickup in
inflation, with producer prices rising broadly last month to
record their biggest year-on-year increase since December 2014.
The minutes of the latest Fed meeting in September, released
on Wednesday, prompted investors to raise their bets of a U.S.
rate increase in December, to a 70 percent chance.
Against the yen, the dollar rose 0.3 percent to 104.03
. It was up 1.2 percent for the week.
The euro fell 0.6 percent to $1.0992, after earlier
hitting $1.0983, its weakest level since late July. It was down
1.6 percent for the week, its worst weekly performance since
(Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by
Anirban Nag in London; Editing by W Simon and Richard Chang)