The dollar had a major decline against its first weekly peers since the beginning of last month on Friday as global risk appetite rebounded, while the Japanese headed for three year low and the price of Bitcoin hit nearly $63,000.
The Dollar Index fell 0.1% to 93.9 and was down 0.2% for the whole of the week in what would be its first weekly loss in six weeks. The greenback tends to rise when investors seek safety.
The global stock markets rallied this week as fears about a stagflationary economy were eased by forecast-beating corporate earnings in the United States.
Only against the other devise considered to be a haven has the dollar managed to maintain momentum of the past five weeks, touching 114.18 for the first time since Friday and rising 0.4% at the same time since November 2018.
Analysts said investors had long dollars squeezed out of their positions in the past few days, and inflation data did not support a further increase in the currency.
The absence of any upside surprise in US CPI consumer price inflation data and confirmation of existing expectations on Fed tapering in the minutes provided no catalyst for additional USD buying and hence the sell-off, said MUFG analyst Derek Halpenny.
The greenback had rallied since early September on expectations that the U.S. central bank would tighten monetary policy more quickly than previously expected amid an improving economy and rising energy prices.
Minutes of the September meeting confirmed this week that a stoppage of stimulus is all but certain to start this year, although policymakers are sharply divided over inflation and what they should do about it.
The world banks are currently predicting a 50-50 probability of a 25 basis point rate hike in July.
The next major glimpse of the U.S. economy comes later on Friday with the release of retail sales figures.
The euro edged up 0.1% to $1.1611 after touching $1.1624 for the first time since Sept. 4.
Sterling rose 0.4% to $1.3722 following its upward climb to the highest since Nov 24 at $1.3734 overnight.
We end our week with risk flying, Chris Weston, Head of Research at brokerage Pepperstone in Melbourne, wrote in a client note.
Equities are going up and the JPY has no place as a hedge because it would drag on overall portfolio performance, Weston said.
In cryptocurrencies, Bitcoin rallied as high as $60,000, an almost six-month peak, as traders became more confident that regulators would approve the launch of an exchange-traded fund based on its futures contracts.