The dollar extended gains Friday, with the euro falling to a session low, after data showed U.S. consumer sentiment improved slightly in June. The euro [EUR-TN 1.3976 -0.0132 (-0.94%) ] fell to $1.3935, a session low, before bouncing back to $1.3968, still down on the day. A rise in the Reuters/University of Michigan preliminary June consumer sentiment survey added to dollar gains. Matt Esteve, a strategist at Washington-based Tempus Consulting, said investors see the United States as likely to emerge from recession before the euro zone and are starting to reward the dollar for this. Other recent top performers, including sterling and the Canadian and Australian dollars, also fell as oil prices dipped and G8 finance ministers prepared to start a meeting in Italy. The dollar had spent most of the week under pressure as investors betting on a global recovery bought higher-yielding currencies and assets such as stocks and commodities, and traders said investors were largely taking profits on Friday. "We're seeing a classic correction," said Brown Brothers Harriman currency strategist Meg Browne. "The top performers on the week are the worst performers today, suggesting the move is largely corrective in nature and will not be sustained." Sterling [GBP-TN 1.6402 -0.0187 (-1.13%) ] fell versus the U.S. currency after having moved above $1.66 on Thursday. The dollar was up against the yen [JPY-TN 98.17 0.55 (+0.56%) ] and the Canadian dollar [CAD-TN Unavailable () ]. Profit-taking on earlier euro gains accelerated after data showed industrial production in the 16-country euro zone plunged 21.6 percent in the year to April, a record fall that was steeper than economists' forecasts. "I'm not surprised the figures are poor. The euro zone economy will suffer, it will suffer more than the rest of the world, ergo my view that the euro will underperform for quite some time," said Maurice Pomery, managing director at Strategic Alpha in London. G8 Meeting on Tap Later on Friday, Group of Eight finance ministers kick off a two-day meeting designed to lay the groundwork for a bigger summit of G8 leaders in July. Exchange rates are not on the agenda, but analysts said they may come up in light of the dollar's recent slide, which has undermined euro-zone exports by making them more costly. A French official told Reuters on Thursday that authorities were watching currency fluctuations closely. "What is damaging for the economy is the volatility of the currency markets." Safe-haven demand boosted the dollar during the bleakest days of the financial crisis last year, but traders have since changed their tune.

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