The Dollar stayed near Thursday's fortnight-low on Friday against a basket of rivals, following a surge in weekly jobless claims fuelling hopes a peak in US rates was looming.
Indeed, the number of people in the US filing unemployment claim benefits rose to its highest level in over one and a half years last week, according to data published on Thursday.
This led the greenback to decline to over a two-week low in the previous session against major peers, as investors viewed the data as an indication the labour market in the US was slowing.
At the time of writing, the Dollar index stood at 103.42 after edging down more than 0.7% in the prior session, the largest daily decline since the middle of March, Reuters reports.
For the week, the index – measuring the Dollar against six major rivals – is down 0.6%, on track for its largest weekly fall also since mid-March.
Elsewhere, the Euro held flat at $1.07735 after rising 0.78% to a week-week intraday high on Thursday as a result of the Dollar sell-off. Whereas Sterling stood at $1.2545, just short of a near one-month high, after rising almost 1% on Thursday.
However, there was a rebound for the Dollar against the Japanese Yen, up 0.48% to 139.6, as Bank of Japan Governor Kazuo Ueda echoed the central bank's aim of keeping an ultra-loose monetary policy.
All eyes are now on the upcoming policy meetings at the Federal Reserve, the European Central Bank (ECB) and the Bank of Japan.
"Before the meetings that we had this week, I would have said I was expecting the status quo. Now I'm not excluding something surprising because a central bank like Canada, which had clearly telegraphed it was on hold, raised rates and said it was concerned about inflation," stated Chester Ntonifor, FX strategist at investment provider BCA.
On Wednesday, the Bank of Canada hiked rates following a four-month pause due to robust household spending and elevated core inflation.
At the time of writing, the Canadian Dollar stood at C$1.334 per Dollar, not too far away from Wednesday's reading of C$1.3321, the strongest in a month.
"For me, it's clear that the ECB is going to stay hawkish; I don't think they're going to be more hawkish than what's already priced in by markets; what is interesting is the Fed," Ntonifor added.