On Friday, the US dollar was on track for its worst week against key peers since early February, as some of the fervour behind the currency's rapid 10% rise dissipated.
The dollar has been strengthened by investors fleeing to safety amid a sell-off throughout markets due to concerns about the impact of rising inflation and Russia's invasion of Ukraine. The dollar index, meanwhile, was on course for a 1.5 percent weekly drop on Friday after advancing in all but two of the previous 14 weeks.
The dollar index, which compares the greenback to six major currencies, remained generally steady on the day at 102.92. It hit a new high of 105.01 on Friday, the highest since January 2003. "While cracks may be forming, we are not convinced that the fundamentals argue in favour of a more protracted drop for the US dollar at this stage," currency experts at MUFG wrote in a note.
According to the report, a recent build-up of long dollar bets could assist extend the pullback. As global markets have been under pressure this week, other safe-haven currencies have surged.
The Swiss franc was expected to rise over 3% against the dollar this week, while the Japanese yen was expected to gain about 1%. The Swiss franc was last trading at 0.97350 francs, while the yen was trading at 128.205 yen, down 0.2 percent.
The euro has benefited from the dollar's decline as well, and was on course to gain 1.5 percent this week. At USD 1.05755, it was down 0.1 percent on the day. Sterling remained steady on the day at $1.24805, on track for its greatest weekly increase since December 2020.