By James Ramage

The dollar edged higher against the euro on Friday after Federal Reserve Chairwoman Janet Yellen said the central bank remains on track to raise interest rates sometime this year.

The dollar rose against the common currency--with one euro buying $1.1015, stronger than the $1.1041 before Ms. Yellen's comments--as it added to gains made earlier following strong U.S. inflation data.

The greenback has gained 0.9% for the day, on pace to reach a three-week high and post its strongest week in more than three years. The dollar rose to JPY121.55 against the yen from JPY121.48 beforehand, now trading 0.4% higher on the day.

Ms. Yellen's comments before the Greater Providence Chamber of Commerce in Rhode Island, acknowledged the pace of U.S. wage growth has been "generally disappointing" but there were some encouraging signs of a pickup since the start of the year.

The Fed chairwoman said the economy's soft patch over the first quarter was transitory and that economic data should improve.

Ms. Yellen's comments "support the dollar's large gains today," Robert Lynch, head of developed-market currencies strategy for the Americas at HSBC Bank USA. "Hearing the Fed chair reiterate that rates are still expected to go up this year may resonate in the market."

Earlier, the dollar rose against the euro and the yen after the U.S. posted strong inflation numbers for April, likely nudging forward market expectations for higher borrowing costs.

Numbers for U.S. inflation increased for a third consecutive month, particularly those that exclude volatile food and energy components, or "core" prices. The Federal Reserve watches inflation numbers closely, alongside labor market data, in determining the health of the U.S. economy and whether to raise interest rates for the first time since 2006.

Stronger inflation numbers joined those for jobless claims and housing starts in giving investors a sense that the U.S. economy is pulling itself out of a slump that dragged growth down to just 0.2% for the first three months of 2015. Many in the markets had expected the economy to expand at a healthy pace and for the Fed to raise interest rates, a move that would make the dollar attractive while central banks in Japan and the eurozone were still easing policy.

Write to James Ramage at james.ramage@wsj.com