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The dollar is set for a fourth consecutive week of gains against its major rivals on Friday, as traders are betting that US interest rates will rise faster than expected amid rising inflation worldwide.
The euro was one of the biggest losers against the dollar and is on track to fall about 1 percent this week, with European Central Bank President Christine Lagarde opposing expectations of tighter monetary policy in the eurozone.
Lagarde reiterated her stance on Friday, saying the ECB should not tighten monetary policy because it could stifle the recovery. And the euro fell in the latest trading 0.5 percent to 1.1395 dollars.
The dollar index, which measures the performance of the US currency against a basket of six major currencies, shows that it is on track to achieve weekly gains of about 0.9 percent.
The dollar rose 0.4 percent on the day to 95.899, close to a 16-month high of 96.266 on Wednesday.
Expectations are growing that the dollar could strengthen in the coming year.
US retail sales beat expectations this week after unexpected data for higher inflation last week. Meanwhile, governments in Europe are grappling with a spike in coronavirus cases and economic data has been mixed.
The Japanese yen weakened slightly against the dollar after the Japanese government unveiled a new stimulus package worth 55.7 trillion yen ($490 billion). The dollar was last up 0.2 percent against the yen to 114,490 yen.
The British pound gave up some of its recent gains and fell 0.4 percent at $1.34440.
The price of the cryptocurrency Bitcoin fell below $60,000, on its way to its worst week in six months, and recorded in the latest trading around $57,500.
