The dollar fell on Friday from its three-week highs in the previous session, as traders’ focus shifted to the Federal Reserve’s policy meeting next week when the U.S. central bank is expected to leave interest rates unchanged.
In mid-morning trading, the dollar index was down 0.6 percent at 96.046, after climbing to a three-week high of 96.676 on Thursday.
The dollar’s decline also coincided with a rally in U.S. stocks, which were bolstered by upbeat earnings.
The euro, on the other hand, rebounded on Friday, steadying after a dovish European Central Bank President Mario Draghi failed to alter an already downbeat assessment on the euro zone’s economy.
The euro on Thursday weakened broadly on those comments and fell to a two-month low of $1.1286 against the dollar. But on Friday, the single currency recovered, rising 0.7 percent to $1.1379.