The dollar has regained some of its strength on Friday, but the upward trend was a cautious as many traders wait for the announcement on interest rates.

This morning the dollar was at 1.2804 to the euro and a pound buys

1.8713 dollars.

Many are waiting to see how two economic reports on the US economy might influence the US Federal Reserve when it meets to decide on interest rates on June 8th.

The core PCE price index is due at 12:30 GMT and the University of Michigan US consumer confidence figures for May due out at 13:45 GMT.

There are also prediction that traders will hope to cover short term positions ahead of the bank holidays on Monday which will affect both the UK and US.

Speaking of the PCE price index report, Carsten Fritsch, a currency strategist at Commerzbank AG in Frankfurt, told Bloomberg: "Today's report should support the view that inflation is still a problem, and the Fed may have to raise rates in June.

"That should support the dollar in the short-term.''