The dollar fell to the lowest level versus the euro since December on Friday, as traders looked for alternatives to the U.S. dollar and fears about the global economy abated.
The euro topped $1.4026 on Friday, before trading at $1.4007, still up from $1.3904 in late North American trading Thursday.
The U.S. trading session has few economic releases and traders noted volume may think ahead of a three-day weekend in the U.S and U.K.
"So as long as global equities remain in consolidation, economic optimism is guarded and fear is curbed, traders have plenty of 'lost' ground to catch up and lift [the] euro back to $1.45," said Ashraf Laidi, chief market strategist at CMC Markets.
The dollar index , a measure of the greenback against its major counterparts, fell to a new seven-month low. It traded at 80.027 from 80.554 late Thursday."In the near-term, the stars are aligned against the US dollar," said foreign exchange strategists at Brown Brothers Harriman. "If the news stream is good, we are told investors are less risk averse and do not need the dollar's security. If the news stream is poor, we are told the U.S. is in horrific shape and the budget deficit and Fed's balance sheet will swell even more" to the detriment of the dollar.
"It is difficult to see what will break this psychology in the coming weeks," they added.
The British pound also rose to its highest level since November versus the U.S. currency, shaking off a Standard & Poor's report Thursday saying the rating agency might downgrade the U.K.'s AAA credit rating. The pound traded at $1.5884 from $1.5848 late Thursday.
The dollar was little changed versus the Japanese yen, at 94.39 yen compared with 94.34 yen Thursday. Japanese officials said they wouldn't intervene in the currency market to keep down the recently sizzling Japanese unit.
