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But
rising stagflation worries arising from the Ukraine war
continued to add pressure on the euro.
The U.S. dollar climbed to a five-year high on the yen after a
strong U.S. inflation report.
After four consecutive weeks of declines, the euro surged this
week as the ECB said it will phase out its stimulus in the third
quarter, opening the door to an interest rate hike before the
end of 2022 to combat soaring inflation.
But the ECB provided little lasting support to the euro, which
edged 0.1% lower to $1.0975 as of 0930 GMT, after rising as high
as $1.11215 on Thursday in a choppy day.
"On another day - i.e. pre-war - EUR/USD might have enjoyed
lasting gains on ECB hawkishness," said Chris Turner, Global
Head of Markets at ING.
"Yet it looks unlikely that an ECB, barely matching (U.S.
Federal Reserve) tightening, can generate a stronger euro in the
face of heavy terms of trade losses."
Talks between Ukraine and Russia on Thursday made little
apparent progress towards ending a war that is now in its third
week.
The dollar climbed to a five-year high on the yen, and was last
up 0.7% to 116.97 yen after touching its highest level since
January 2017 as markets prepare for Fed tightening.
Both the Fed and the Bank of Japan have policy meetings next
week, but while the Fed is all but certain to hike rates from
their pandemic low, the BOJ is set to remain an outlier.
The dollar rose against a basket of peers by 0.37% to 98.730.
Commodity-linked currencies took a breather. After their recent
storming rally driven by higher commodity prices, the Norwegian
crown and Canadian dollar were unchanged, while the Australian
and New Zealand dollars lost a little ground.
The Ukraine war has also weighed on sterling, which has fallen
2.7% this month versus the dollar and hit a 16-month low on
Friday at $1.3056.
Bitcoin fell 0.5% to $39,152. It had surged earlier this week
after U.S. President Joe Biden signed an executive order on
Wednesday requiring the government to assess the risks and
benefits of creating a central bank digital dollar.
(Reporting by Joice Alves; Editing by Mark Heinrich)
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