By Carla Mozee, MarketWatch LOS ANGELES (MarketWatch) — The U.S. dollar came off one-months lows against the euro and the British pound Friday, but the greenback was still in line to post a loss of more than 1% for the week. The dollar on Thursday fell to lows not seen since late June against its two biggest European rivals, as The Wall Street Journal reported that officials at the U.S. Federal Reserve were likely to review the language they use to describe future plans for monetary stimulus. The euro EURUSD +0.0986% on Friday traded at $1.3281, down slightly from $1.3290 on Thursday, when it reached its strongest level since June 19, according to data from FactSet. The British pound GBPUSD +0.0745% bought $1.5400, off from $1.5425 Thursday. The pound, which last traded above the $1.54 level on June 25, also found support Thursday after data showed the U.K.’s second-quarter gross domestic product expanded 0.6% compared with the first quarter and 1.4% higher than a year ago, in line with expectations. The Wall Street Journal report said the Fed is likely to keep monetary easing policies in place, though it may slow the pace of its bond-purchase program later this year if the economy continues to improve. That was in line with what the Fed has been saying recently. However, comments in the previous week by Federal Reserve Chairman Ben Bernanke rekindled some speculation the Fed may refrain from starting a stimulus wind-down soon. Monetary stimulus is seen as hurting the value of the dollar. Concerns about a possible delay in tapering the bond buys played a role in the dollar’s decline this week, with the ICE dollar index DXY -0.10% , a gauge of the greenback’s movement against six other major currencies, facing a loss of 1.2%. On Friday, the index rose to 81.729 from 81.677. But the WSJ Dollar Index XX:BUXX -0.41% , an alternative measure of the currency’s moves against a slightly wider basket, fell on Friday to 73.94 from 74.06. It was also on pace for a weekly decline of 1.2%. The Fed will meet on Wednesday, and its “assessment of recent mixed data will clearly be watched closely as a guide to whether the start of tapering will be delayed beyond the September meeting, which was initially the consensus favorite as to when it would begin,� AMP Capital head of investment strategy Shane Oliver said to clients Thursday. Investors later Friday will receive the final reading on U.S. consumer sentiment in July, with the survey expected to show a rise to 84 from a preliminary reading of 83.9. Late next week, attention will turn to the U.S. government’s key jobs report for July, with labor-market conditions a major component of the Fed’s assessment of economic recovery. Elsewhere Friday, the U.S. dollar USDJPY -1.2523% couldn’t hold gains against the Japanese yen following figures showing Japan registered mild inflation in June. The dollar fell below the 99-yen level for the first time since June 11, buying ¥98.79. Japan is fighting to rid itself of deflation that’s weighed on the economy for years. The dollar had advanced to ¥99.29 from ¥99.11 just after Japan’s Finance Ministry said the core consumer price index rose 0.4% from June 2012, though it was unchanged compared with May’s levels. Analysts polled by Dow Jones Newswires had expected an annual gain of 0.3% for national prices in June. In the previous month, the national May core CPI was flat on an annual basis. Meanwhile, the Australian dollar AUDUSD +0.3208% traded at 92.70 U.S. cents, down from 92.78 U.S. cents on Thursday. Carla Mozee is a reporter for MarketWatch, based in Los Angeles. Follow her on Twitter @MWMozee.

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