The dollar retreated from a 12-week high as Federal Reserve Chair Jerome Powell hinted at the possibility of further rate hikes, while the euro saw a slight increase after China reduced its stamp duty on stock trading.
The US dollar was cautious as traders awaited economic data, while the yen struggled near intervention levels as the dollar remained strong.
The US dollar dropped to a two-week low against the euro and other currencies after data revealed lower than expected private payroll growth in August, leading to speculation that the Federal Reserve will halt interest rate increases.
The U.S. dollar drifted in cautious trading as investors considered U.S. jobs data that indicated a potential slowdown, suggesting that the Federal Reserve may be nearing the end of its monetary tightening cycle.
The dollar has reached a five-month high as investors anticipate the need for elevated interest rates due to the strong US economy, with factors such as weak growth in China and Europe, rising US yields, and falling equity prices further supporting the case for dollar strength.
Central Europe's currencies are settling into a softer range as monetary easing in the region begins and attention shifts to the upcoming US rate decision.
Bond yields eased slightly on Friday after a turbulent week, as signs of the Federal Reserve keeping interest rates high for an extended period of time emerged.
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