The dollar surged against the euro and Swiss franc on Friday after a much stronger-than-expected US durable goods report reinforced the view that the US economic recovery is on a solid footing.
US orders for big-ticket items meant to last at least three years rose 3.4 per cent in March, well above the 0.8 per cent gain that Wall Street economists were expecting.
February orders were revised sharply upward as well, to a gain of 3.8 per cent, from the previously reported 2.5 per cent increase.
In morning New York trade, the euro fell to session lows around $1.1823 against the dollar, before rebounding to $1.1834. Against the yen, the dollar came off intraday lows to trade at 109.05 yen, still down about 0.3 per cent.
The US currency rose against the Swiss franc to 1.3166 francs. Sterling dropped to $1.7687.
Despite the strong U.S. data, some analysts expressed caution ahead of a host of Federal Reserve speakers today. Analysts said that they are awaiting any indications from Fed speeches that US interest rates could be headed higher after Chairman Alan Greenspan's testimonies this week did nothing to dampen expectations of increases later this year.
Markets are also preparing for a Group of Seven meeting of finance ministers from industrialised nations on Friday and Saturday in Washington, D.C.
Analysts say the final G7 communique to be released on Saturday is unlikely to differ substantively from the text of the statement during the February meeting in Boca Raton, Florida.
With the dollar trading about 10 cents above February's record lows against the euro, currencies are expected to be less of an issue at this meeting than in February when the G7 decried "excess volatility" and urged greater exchange rate flexibility in some economic areas.