Dollar gaining ground

FRANKFURT, Germany (AP) -- The dollar edged upward Monday with an increase in U.S. consumer prices diminishing chances of another interest rate cut.

In afternoon European trading, the euro bought $1.4376, down from $1.4425 on Friday in New York. The British pound edged up to $2.0155 from $2.0154, while the dollar slipped to 113.25 Japanese yen from 113.42 yen.

The euro was lower after a U.S. Labor Department report on Friday showed U.S. consumer inflation surged by the largest amount in more than two years in November, led by gasoline prices.

"The dollar is making impressive gains across the board in the face of last week's upbeat inflation data," said James Hughes, a market analyst at CMC Markets.

Last week, the U.S. Federal Reserve Bank cut interest rates by a modest quarter percentage point to 4.25 percent.

The strong pricing report suggests the Fed may now feel less inclined to keep cutting rates as it tries to keep inflationary pressures in check. That would keep the dollar's yield relatively strong compared with those of other currencies.