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The dollar rose sharply versus other major currencies the after the Federal Reserve hiked its discount rate to banks, fueling speculation that the central bank will soon begin to tighten monetary policy.
In a surprise move the Fed said was in response to "continued improvement in financial market conditions," the Fed raised its emergency lending rates 25 basis points to 0.75 percent Thursday afternoon.
The dollar spiked higher on the news, even as the Fed attempted to dispel the notion the move was a prelude to broader tightening. It repeated its previous statement that "economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period."
The dollar, which was already at 9-month highs versus the euro, added almost another penny to 1.3447 before leveling off to 1.3500 overnight.
Eurozone's private sector output growth stable in February, a flash report from the Markit Economics said on Friday. The composite output index stood at 53.7 in February, unchanged from the previous month.
Meanwhile, the dollar continued to push higher versus the sterling Friday morning, rising to a fresh 9-month peak of 1.5390. Before seeing steady gains over the course of January and February, the dollar was stuck in a narrow range near 1.6500 for more than six months.
U.K. retail sales was down 1.8% on a monthly basis in January, the Office for National Statistics said in a report on Friday. This was the biggest decrease since June 2008 and larger than the expected 0.5% fall.
A day after the Bank of Japan held steady on interest rates, the dollar rose further versus the yen, hitting a 6-week high of 92.08.
The buck firmed up to C$1.05 against its Canadian counterpart, paring some of its losses from earlier in week.
Friday's economic calendar from the US is light, with only the consumer price index on tap from the Labor Department.
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