(MENAFN- AFP) The dollar came under further selling pressure on Friday as investors turned cautious over falling global stocks while awaiting fresh US data on retail sales later in the day.
The prospect of a gradual tightening of US monetary policy if and when the US Federal Reserve starts raising interest rates has weighed on the US currency.
"The Fed may be seeing that there's no need to force markets to increase how much they are pricing in a December rate hike," said Etsuko Yamashita, chief economist at Sumitomo Mitsui Banking Corp. in New York.
"The Fed may be hedging against uncertain developments in financial markets as there's still a month before its policy meeting. That means it'll be difficult for the dollar to keep climbing for the next few weeks," she told Bloomberg News.
The greenback fell against all 10 developed-nation currencies except the Norwegian krone this week as Fed vice chairman Stanley Fischer said Thursday the Fed's decision to delay raising rates has helped to offset the economic headwinds caused by a strengthening dollar.
Policy should be tightened only gradually once the Fed starts raising rates, New York Fed president William C. Dudley said earlier.
On Friday, however, falling global stocks encouraged yen-buying among investors keen to avoid risk.
The euro, meanwhile, also faced selling orders after European Central Bank president Mario Draghi hinted at a possible expansion of the ECB's asset purchase programme.
Draghi told the European Parliament on Thursday that "signs of a sustained turnaround in core inflation have somewhat weakened" and "a sustained normalisation of inflation could take longer than we anticipated in March."
The dollar, which had traded at the 123-yen level earlier this week, bought 122.61 yen in Asian afternoon trade, nearly unchanged from 122.60 in New York on Thursday.
The euro bought $1.0791 and 132.31 yen, from $1.0814 and 132.58 yen in New York.
The dollar was still stronger against most emerging economy currencies.
The Indonesian rupiah fell 0.4 percent against the greenback, while the Philippine peso and the Thai baht also edged down.
The Malaysian ringgit lost 0.2 percent and the Singapore dollar declined by 0.1 percent, but the Indian rupiah rose 0.3 percent.
-- Bloomberg News contributed to this report --
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