The dollar was headed for its best week against the yen in three months on Friday, after Federal Reserve Chair Jerome Powell and a chorus of Fed officials poured cold water on market expectations of a peak in U.S. rates.

A slew of Fed policymakers including Powell on Thursday said they are still not sure that interest rates are high enough to finish the battle with inflation, comments taken as hawkish by markets and which sent the greenback rising.

The dollar stood near a one-year high at 151.38 yen on Friday and touched one-week highs against the Australian and New Zealand dollars.

The remarks from Fed officials came a week after the U.S. central bank left interest rates steady and cemented expectations that rates could have peaked, causing the dollar and Treasury yields to tumble in the aftermath.

The greenback, however, regained its footing this week and was eyeing a weekly gain of roughly 1.3% against the yen, its best performance since August.

The Aussie and the kiwi were likewise headed for a 2.4% and 1.8% weekly decline against the dollar respectively, also their steepest drop in months.

The Australian dollar last stood at $0.6359 after slipping to a one-week low of $0.6352 earlier in the session, while the New Zealand dollar was last at $0.5893, having similarly hit a one-week trough of $0.5886 earlier.

Falling oil prices and a faltering economic recovery in China have also kept a lid on the Antipodean currencies.

Australia's central bank, in its quarterly Statement on Monetary Policy released on Friday, warned there were risks of further upside surprises to inflation following its latest hike in interest rates, while also raising forecasts for economic growth and employment.

Elsewhere, the euro steadied at $1.0668, while sterling slipped 0.02% to $1.2218. They were both on track to lose 0.56% and 1.3% for the week, respectively.

Source : Reuters