Investing.com - The dollar traded largely higher against most major currencies on Friday after dovish comments from European Central Bank President Mario Draghi coupled with a Chinese rate cut sparked safe-haven demand for the greenback

Dollar gains as Draghi warns on European economy

Profit taking capped the dollar's advance at times, as the currency has seen hefty demand in recent sessions as markets prepare for U.S. monetary to tighten while Europe and Japan move in the opposite direction.

In U.S. trading on Friday, EUR/USD

 was down 1.20% at 1.2391.

The euro came under pressure after ECB President Mario Draghi reiterated on Friday that the central bank is prepared to act rapidly if low inflation persists.

Draghi also expressed concerns over the euro zone's weak growth, pointing out he saw no improvements in the coming months.

The ECB head was speaking at the 24th European Banking Congress "Reshaping Europe," in Frankfurt, and his comments sparked expectations for fresh stimulus.

The ECB's current stimulus program includes purchases of asset-backed securities and covered bonds, though markets are keeping a close eye out for plans to announce purchases of government debt, a stimulus tool known as quantitative easing.

Also supporting the dollar was news that China cut its benchmark one-year deposit rate by 25 basis points to 2.75% and trimmed its one-year lending rate by 40 basis points to 5.6% to spur recovery.

Upbeat U.S. data released on Thursday continued to support the dollar as well.

The Federal Reserve Bank of Philadelphia reported that its manufacturing index improved to 40.8 this month from 20.7 in October.

Analysts had expected the index to decline to 18.5 in September.

Also on Thursday, the Labor Department reported that the U.S. consumer price index was unchanged in October, beating expectations for a 0.1% dip.

On a year-over-year basis consumer prices rose 1.7% last month, unchanged from September, and stronger than market calls for a 1.6% jump.

Core inflation, which strips out volatile food and energy components, rose by 0.2% during the month, pushing the annual rate up to 1.8%, both figures in line with market forecasts.

The dollar was down against the yen, with USD/JPY down 0.37% at 117.74, and up against the Swiss franc, with USD/CHF up 1.22% at 0.9699.

The greenback was up against the pound, with GBP/USD down 0.30% at 1.5646.

In the U.K. on Friday, the Office for National Statistic reported that public-sector net borrowing rose by £7.05 billion in October, after a revised increase of £10.57 billion the previous month.

Analysts had expected public sector net borrowing to rise by £6.90 billion.

The dollar was down against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.57% at 1.1240, AUD/USD up 0.53% at 0.8665 and NZD/USD up 0.10% at 0.7878.

Statistics Canada said that consumer price inflation rose 0.1% last month, compared to expectations for a 0.3% fall, after a 0.1% uptick in September.

Core consumer prices, which exclude the eight most volatile items, rose 0.3% in October, more than the expected 0.2% gain, after a 0.2% increase the previous month.

The US dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.79% at 88.40.