The dollar index rose to its highest level in seven weeks on Friday, as investors prepare for a longer stay in high US interest rates after a batch of strong economic data in the United States.
The yen fell after a volatile Asian trading session, as incoming Bank of Japan Governor Kazuo Ueda said it was appropriate to maintain ultra-loose monetary policy.
Strong US jobs data and statements by Federal Reserve officials this month that they were open to higher interest rates to curb inflation erased losses incurred by the dollar since the start of the year.
And the dollar index, which measures the performance of the greenback against six other currencies, rose 0.2 percent to 104.80, the highest level since January 6.
It is heading for its fourth consecutive weekly gain, after rising 2.5% this month.
Simon Harvey, head of foreign exchange analysis at Monex, said markets will likely wait for further comments from Fed officials and February data to re-evaluate the rate hike.
Investors expect US interest rates to peak in July at 5.35 percent and to remain above 5 percent until the end of the year.
The euro fell 0.1 percent to $1.0583. The pound sterling fell 0.27 percent against the US currency, to $1.1985.
The yen was volatile, falling 0.45 percent to 135.29 against the dollar, after touching its highest level since Monday in Asian trading hours.
Incoming BoJ President Ueda, who was nominated earlier in the month in a surprise move, warned of a heavy uncertainty still surrounding Japan’s economic recovery, underlining the BoJ’s continued loose monetary policy.
