LONDON—The euro, the pound and commodity currencies, such as the Australian dollar, were higher against the dollar Friday as risk sentiment improved.
In European trading, the dollar fell to one-month lows against the euro and the British pound.
Early morning in New York, the euro was at $1.3091 from $1.3079 late Thursday in New York. The euro was also at 112.28 yen from 112.27 yen, while the dollar had slipped back to 85.75 yen from 85.84 and was at 1.0139 Swiss francs from 1.0152 francs.
The pound, meanwhile, rose to $1.5674 from $1.5635, despite a string of disappointing economic news from the U.K. that had hurt sterling earlier this week.
The Australian dollar rallied to $0.9435 from $0.9368
An increase in global liquidity following Japan's market intervention and the prospect of more quantitative easing from the U.S. Federal Reserve has helped to lift immediate fears about global recovery.
Investor concerns about the sovereign-debt crisis in the euro zone have also subsided following a series of successful bill and bond auctions from the region this week. The latest took place Thursday as both France and Spain raised funds with little difficulty. In Spain's case, this appeared to suggest that the country is no longer seen as the high sovereign risk it once was.
Moves against the yen were limited as the market waits to see whether the Bank of Japan is prepared to intervene further to drive the yen lower. There has been little sign of the Japanese central bank since it intervened on Wednesday to push the dollar up by two to three yen.
One of the main losers has been the Swiss franc, which was under pressure both because of the move out of havens and the threat by the Swiss National Bank Thursday that it will intervene, if needed, because of slower Swiss growth prospects in 2011.
Another major issue is the continued pressure from the U.S. on China to let the yuan rise. Treasury Secretary Timothy Geithner stopped short of accusing the country of currency manipulation Thursday but insisted that Beijing simply isn't doing enough to accelerate the rise in the Chinese currency.
China has allowed the yuan to rise in recent months to its highest level since 2005, but the gains have been gradual and ensure that Chinese exports remain highly competitive.
