Fear Of Inflation Eases So Dollar Falls

The dollar reversed course to end lower Friday after the government reported a surprising drop in wholesale prices last month, dimming expectations that the Federal Reserve will raise interest rates soon.

Fear that Japan would report a big increase in its trade surplus Monday also depressed demand for the dollar. Traders who earlier had purchased dollars on a bet the currency would rise sold them as the day progressed.

The dollar reached an intraday high of 1.7073 marks before retreating to settle at 1.6935 marks, down from 1.7056 Thursday. The dollar also reached a high of nearly 124 yen, the highest since Feb. 19, before falling to settle at 123.38 yen, down from 123.41 yen Thursday. The pound cost $1.6010, up from $1.5974.