The dollar slumped on Friday amid surging share prices and lower Treasury yields after data showed U.S. inflation cooling, while several Fed policymakers made the case for reducing borrowing costs slowly next year.
The PCE price index rose 0.1% in November, below expectations and down from 0.2% in October.
San Francisco Fed President Mary Daly and other policymakers said the central bank would likely resume reducing rates next year, albeit slowly, and that the December cut was a close call.
Chicago Fed President Austan Goolsbee said he sees inflation headed toward the Fed's 2% target, implying more easing.
Republicans in the U.S. Congress mounted a third attempt to avert a government shutdown on Friday.
The euro rose amid short-covering ahead of the holidays, fueled by improving risk sentiment.
Separately, Volkswagen reached an agreement with unions to avert mass strikes.
The pound gained even after data showed British retail sales rose by a weaker-than-expected 0.2% in November.
Treasury yields were down 1 to 7 basis points.
The 2s-10s curve was fell 4 basis points to +20.6bp.
The S&P 500 surged 1.4% during a triple-witching day.
Oil gained 0.5% and gold was up 1.26%, helped by the weaker dollar.
U.S.
President-elect Donald Trump said on Friday the European Union should step up U.S. oil and gas imports.
Heading toward the close: EUR/USD +0.75%, USD/JPY -0.84%, GBP/USD +0.77%, AUD/USD +0.41%, DXY -0.70%, EUR/JPY -0.12%, GBP/JPY -0.09%, AUD/JPY -0.40%.
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