The dollar shed early gains and turned lower on Friday after U.S. consumer prices increased further in November, posting their largest annual rise in 39 years as investors took profits before a Federal Reserve meeting next week. The data, along expected lines, puts added pressure on policymakers to withdraw pandemic-era stimulus at a faster pace in coming months. "There is some relief that we did not get a 7 (percent) handle on headline inflation and the dollar response is partially because there is a lot priced into the markets already in terms of rate expectations next year," said Kenneth Broux, an FX strategist at Societe Generale in London. Against a basket of its rivals , the dollar briefly fell 0.1% to 96.10 before trimming losses in volatile trading. Money markets expect more than 60 bps in rate hikes from the U.S. central bank next year. The consumer price index rose 0.8% last month after surging 0.9% in October, the Labor Department said on Friday. In the 12 months through November, CPI accelerated 6.8%. That was the biggest year-on-year rise since June 1982 and followed a 6.2% advance in October. read more The dollar"s losses pushed other currencies higher with sterling edging 0.2% higher to $1.324. The euro , seen as vulnerable to a Federal Reserve hike especially if euro zone rate rises lag, trimmed losses to stand down 0.1% on the day at $1.1281. Elsewhere, China"s yuan fell in onshore and offshore markets after the People"s Bank of China (PBOC) raised FX reserve requirements for the second time since June, and was further pressured when the central bank set its trading band midpoint weaker than expected. read more Reporting by Tommy Wilkes and Saikat Chatterjee; Editing by Krishna Chandra and John Stonestreet Our Standards: The Thomson Reuters Trust Principles.