Geoffrey Smith 

Investing.com — The dollar was slightly lower in early trade in Europe on Friday, after a strong rebound in risk appetite on Thursday supported higher-yielding currencies against safe havens.

By 3:30 AM ET (0730 GMT), the that tracks the greenback against a basket of advanced economy currencies was down less than 0.1% at 93.938, thanks mainly to declines against the basket’s commodity currencies.

The stocks fell 0.2% and 0.1% respectively, just one day after weaker than expected producer price inflation prints and solid bank earnings led to a dramatic rise in U.S. stock prices.

Also, it traded above $1.16 again for the 10th time. Sterling maintained its Thursday gains of $1.3697 on Thursday, following strong reaction to EU progress regarding implementation of Brexit agreements in Northern Ireland.

This week’s end is expected to be relatively calm as inflation fears ease a bit. The benchmark Treasury bond yields are now at 1.54% which is eight basis points lower than their peak earlier in the week.

However, the factors behind inflation – including massive fiscal and monetary stimulus that has led to higher energy prices and shortages of semiconductors and other components – are taking time to unwind. Analysts noted that the PPI’s slight undershoot was due to the – perhaps short-lived-, decline in airline costs. Prices for , and other industrial commodities continue to trade near multi-year highs, and there are increasing signs of organized labor demanding higher pay rises (notably at U.S. agricultural equipment maker Deere (NYSE:) & Co.).

Richmond Federal Reserve President Tom Barkin said on Thursday that there would be “no shame” in admitting that inflation is proving ‘stickier’ than expected – comments taken by some as a veiled criticism of a Fed board that has stuck doggedly to the narrative that this year’s rise in prices is only ‘transitory’.

The day’s main data will be U.S. at 8:30 AM ET (1230 GMT), where a decline of 0.2% on the month is expected, extending a pattern of stop-start consumption that has established itself over the last six months. Attention will also be given to the University of Michigan’s Consumer Sentiment index for September at 10 AM ET, especially with regard to its inflation expectations. Last month’s survey showed consumers expect prices to rise 4.6% over the next 12 months, down from a 10-year high of 4.7% in July.