The dollar index rose on Friday, on track for its strongest monthly performance since last November amid expectations the Federal Reserve may raise rates in coming months and investors awaiting fresh guidance from the head of the U.S. central bank.
The index .DXY was up 0.1 percent at 95.259, having pulled back from Wednesday's two-month peak of 95.661, with month-end rebalancing flows by asset managers likely to limit the gains, traders said. Holidays in Britain and the U.S. are likely to curtail volumes on Monday.
The dollar is still up 2.3 percent this month, among the top performing currencies, after a string of Fed officials raised expectations for a hike in interest rates as early as June.
"We will see some consolidation in the dollar after the recent gains with expectations of a June hike still in play," Nomura currency strategist, Yujiro Goto, said.
"Next week is a big one with U.S. non-farm payrolls and ISM (Institute for Supply Management) data, so investors are awaiting for more data," Goto said.
Fed Chair Janet Yellen is due to speak at an event hosted by the Harvard University at 1715 GMT. Her speech comes after a slew of Fed policymakers from John Williams to Bill Dudley and James Bullard all sounded relatively hawkish.
"I'm not sure how concerted this whole thing has been. If it's all kind of planned or if it's just individual members speaking," Nordea Bank head of trading, Jesper Bargmann, said, referring to the Fed officials' comments....MORE