It's one further variable ... that will encourage weaker sentiment towards the yellow metal.''

Washington (May 9)   The dollar extended its rally versus the euro on Friday amid renewed expectations that stimulus from the European Central Bank is being planned for June.

The ECB refrained from easing at this week's policy meeting, but deflationary risks may compel them to act soon.

"The governing council is comfortable with acting next time," European Central Bank President Mario Draghi said, referring to the bank's scheduled meeting next month.

The dollar jumped to USD1.3750 versus the euro, having tested a multi-month low near USD1.40 before Draghi's press conference yesterday.

Gradual gains took the dollar to USD1.6846 versus the sterling, up about a penny from its lowest this week.

There was little movement near Y101.75 versus the yen, with the pair holding in a relatively tight range for the past few months.

Traders today weighed a some encouraging US economic data.

US wholesale inventories rose more than expected in March, according to figures released Friday by the Commerce Department .

Inventories rose 1.1% in March, while economists were looking for a 0.4% increase.

Also, inventories were up by a revised 0.7% in February, a bit higher than the prior 0.5% reading.

Germany's exports declined for the second straight month in March, data from Destatis showed. Defying expectations, exports fell 1.8% month-on-month in March, sharper than the 1.3% fall seen in February. Shipments were expected to rise by 1.3%.

At the same time, imports declined 0.9%, reversing a 0.4% rise in February. Economists had forecast 0.6% increase for March.

UK industrial production dropped slightly in March largely due to a fall in oil and gas extraction, data from the Office for National Statistics revealed. Industrial production fell 0.1% from February, when output rose 0.8%. Production was forecast to decrease 0.2%.