The dollar index, which measures the greenback against six major peers, rose 0.44 percent to 103.6126 in late trading.
Consumer spending, which accounts for more than two-thirds of U.S. economic activity, increased 0.8 percent last month from June, the highest rate in half a year, according to the U.S. Commerce Department on Thursday.
The PCE index showed that prices increased 0.2 percent on a monthly basis and 3.3 percent annually. The core PCE index, which excludes food and energy, showed prices increased 0.2 percent from the month before and 4.2 percent for the 12 months ended in July. That matched economists' expectations.
Additionally, the number of Americans applying for jobless benefits fell by 4,000 to 228,000 the week ending Aug. 26, the Labor Department reported Thursday. The four-week moving average of claims rose by 250 to 237,500.
"On balance, I would say today's data is not too hot or cold. It offered few surprises and thus reinforced the notion of the Fed holding rates. Markets continue to almost fully price in no change at the next Fed meeting on Sept. 20," said Aaron Hill, an analyst at FP Markets.
In the eurozone, the EU measure of inflation also accelerated in August to 5.7 percent from 5.1 percent a month ago, official data showed on Thursday.
In late New York trading, the euro was down to 1.0846 U.S. dollars from 1.0923 dollars in the previous session, and the British pound decreased to 1.2665 U.S. dollars from 1.2717 dollars.
The U.S. dollar bought 145.4070 Japanese yen, lower than 146.1900 Japanese yen of the previous session. The U.S. dollar was up to 0.8830 Swiss francs from 0.8783 Swiss francs, and it was down to 1.3514 Canadian dollars from 1.3528 Canadian dollars. The U.S. dollar increased to 10.9402 Swedish krona from 10.8297 Swedish krona.
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