NEW YORK: Tumult in the world's major economies sent traders rushing to the dollar again on Friday, the end of a month which has seen the euro lose around six percent of its value against the greenback.
"The US dollar traded higher against all of the major currencies as investors pared back risk ahead of a very busy trading week," said Kathy Lien, director of currency research at GFT.
Amid ongoing concerns about Europe's debt levels, an unexpected rise in inflation in Europe gave traders pause ahead of a meeting of the European Central Bank next week.
The rise creates a dilemma for European Central Bank chief Jean-Claude Trichet who chairs his final policy meeting next week.
Trichet must now make a difficult call on whether to reduce interest rates to face a weak economy despite rising prices.
The euro dropped to $1.3451 from $1.3586 in New York late Thursday. The dollar rose to 77.03 yen from 76.79 yen on Thursday.
"The euro traded sharply lower against the US dollar as investors wonder how much longer it will take for European Finance Ministers to decide whether to release the next tranche of aid to Greece, let alone unveil a grand master plan to save the euro," said Lien.
The dollar also strengthened against the Swiss currency, to 0.9040 francs from 0.8977 francs.
The dollar was largely unchanged against the British pound, which traded at $1.5649 compared to $1.5618.
