NEW YORK, March 13 (Reuters) - The dollar extended losses against the euro and pared gains after data showed U.S. inflation data for February was in line with market expectations, suggesting that the Federal Reserve remained on track to raise interest rates at a gradual pace..
The euro gained 0.2 percent against the dollar to $1.2355 after the data. Against the yen, the dollar pared gains to trade below 107 yen.
The Labor Department said its consumer Price Index rose 0.2 percent last month after jumping 0.5 percent in January. In the 12 months through February, the CPI rose 2.2 percent, up from 2.1 percent in January as the weak reading from last year dropped from the calculation. (Reporting by Gertrude Chavez-Dreyfuss Editing by Chizu Nomiyama)