(fxcue news) - The U.S. dollar shed ground against its major counterparts on Friday after soft personal consumption expenditures (PCE) data raised hopes of more interest rate cuts by the Federal Reserve next year. Data from the Commerce Department said the personal consumption expenditures (PCE) price index inched up by 0.1% in November after rising by 0.2% in October. Economists had expected prices to increase by another 0.2%. The annual rate of growth by the PCE price index accelerated to 2.4% in November from 2.3% in October, slightly slower than the 2.5% jump economists had expected. The annual rate of growth by the core PCE price index in November came in at 2.8%, unchanged from October, while economists had expected an acceleration to 2.9%. The report said personal income rose by 0.3% in November after climbing by an upwardly revised 0.7% in October. Economists had expected personal income to rise by 0.4% compared to the 0.6% increase originally reported for the previous month. Meanwhile, personal spending climbed by 0.4% in November after rising by a downwardly revised 0.3% in October. Economists had expected personal spending to grow by 0.5% compared to the 0.4% advance originally reported for the previous month. The University of Michigan released a report showing consumer sentiment in the U.S. improved in line with its preliminary estimate in the month of December. The report said the consumer sentiment index for December was unrevised from the preliminary estimate of 74.0, in line with economists' expectations. The consumer sentiment index increased from 71.8 in November. The dollar index dropped to a low of 107.59 around noon, but recovered some lost ground subsequently. The index was last seen at 107.83, down 0.53% from previous close. Against the Euro, the dollar weakened to 1.0431 from 1.0363. Against Pound Sterling, the dollar eased to 1.2569, losing more than 0.5%. The dollar lost ground against the Japanese currency, easing to 156.46 yen. The Aussie firmed to US $0.6252 against the Aussie. Against Swiss franc, the dollar dropped to CHF 0.8932 from CHF 0.8969. The Loonie strengthened to 1.4374 against Sterling, gaining marginally.