The euro climbed against the dollar on Friday after data on U.S. consumer prices was seen as reducing the likelihood that the Federal Reserve would tighten monetary policy sooner than had been anticipated.
The report on the Consumer Price Index eased the hawkish sentiment on interest rates that has sprung up in recent months on improving U.S. economic growth data. The consumer demand side of the report also reduced chances of further monetary easing by the Fed, leading U.S. Treasury prices to retreat sharply.
U.S. stocks traded near break-even but global stocks advanced as an unexpected jump in European exports in January and signs of strong consumer demand in U.S. inflation data from February buoyed optimism about the world economy's health.
The U.S. CPI increased 0.4 percent after a 0.2 percent advance in January, with gasoline accounting for more than 80 percent of the rise, the Labor Department said.
In Europe, a surge in German exports helped the euro zone to cut its trade deficit by more than half to 7.6 billion euro in January from a year earlier, the European Union's statistics office Eurostat reported.
The trade surplus was the fifth consecutive positive month even though the euro zone's economy is expected to shrink 0.3 percent this year.
Wall Street opened higher and European shares hit their highest since July, while government debt prices on both sides of the Atlantic retreated sharply.
The Dow Jones industrial average .DJI was up 1.17 points, or 0.01 percent, at 13,253.93. The Standard & Poor's 500 Index .SPX was up 0.32 points, or 0.02 percent, at 1,402.92. The Nasdaq Composite Index .IXIC was down 4.45 points, or 0.15 percent, at 3,051.92.
The MSCI world equity index .MIWD00000PUS rose 0.5 percent, while European stocks .FTEU3 also added 0.5 percent, rising to their strongest level since July.
The dollar fell against the euro and pared gains against the yen after the U.S. inflation report reduced the likelihood that the Federal Reserve will tighten monetary policy sooner than anticipated.
The euro rose 0.7 percent at $1.3173, while the U.S. dollar index .DXY was down 0.5 percent at 79.740.
The 30-year U.S. Treasury bond extended its loss to one point as global equity market strength dimmed the allure of safe-haven U.S. government debt.
The 30-year bond fell as much as a point, lifting its yield to 3.46 percent before trimming losses to be down 15/32 to yield 3.44 percent, while the benchmark 10-year U.S. Treasury note was down 13/32 in price to yield 2.33 percent.
Brent crude rebounded above $124 a barrel as attention returned to restricted Iranian exports and global outages that are trimming spare capacity, following a steep drop in prices the previous day.
Brent oil rose $1.58 to $124.18 a barrel. U.S. light sweet crude oil rose 70 cents to $105.81 a barrel.
Gold fell, in its largest weekly decline in three months, after top consumer India said it would double import duties on bullion and upbeat U.S. data this week fed optimism over the global economy, boosting risk appetite.
Spot gold prices fell $3.83, or 0.23 percent, to $1,653.90 per ounce.