(fxcue news) - The U.S. dollar firmed against its major counterparts in the New York session on Friday, as a key inflation reading matched expectations, supporting expectations for a rate cut next month. Data from the Commerce Department showed that the personal consumption expenditures (PCE) price index rose by 0.2 percent in July after inching up by 0.1 percent in June. The modest increase matched expectations. The core PCE price index, which excludes food and energy prices, also crept up by 0.2 percent in July. The uptick matched the increase seen in June as well as economist estimates. Meanwhile, the report said the annual rates of growth by the PCE price index and the core PCE price index were both unchanged at 2.5 percent and 2.6 percent, respectively. Economists had expected the year-over-year growth by both the PCE price index and the core PCE price index to tick up by 0.1 percentage point. The readings on inflation, which are said to be preferred by the Federal Reserve, were included in the Commerce Department's report on personal income and spending. The report said personal income increased by 0.3 percent in July after rising by 0.2 percent in June. Economists had expected income to rise by another 0.2 percent. The Commerce Department also said personal spending climbed by 0.5 percent in July after increasing by 0.3 percent in June, in line with economist estimates. Following the data, traders increased bets of a 25 basis point rate cut in September, but scaled back expectations of a 50 basis point move. The greenback strengthened to 1-week highs of 1.3129 against the pound, 0.8510 against the franc and 145.74 against the yen, from yesterday's close of 1.3166, 0.8472 and 144.97, respectively. The currency is seen finding resistance around 1.27 against the pound, 0.92 against the franc and 147.00 against the yen. The greenback climbed to an 11-day high of 1.1053 against the euro and a 4-day high of 1.3509 against the loonie, from yesterday's closing values of 1.1077 and 1.3484, respectively. The currency is likely to locate resistance around 1.06 against the euro and 1.38 against the loonie. The greenback advanced to 2-day highs of 0.6774 against the aussie and 0.6240 against the kiwi, from Thursday's close of 0.6798 and 0.6258, respectively. It is poised to challenge resistance around 0.63 against the aussie and 0.60 against the kiwi.