The Dollar gained support on Friday as a hawkish stance from central banks fuelled fears monetary tightening policies could drive economies into a more profound downturn.
In the UK, the Pound struggled to maintain gains from the Bank of England's 50 basis point rate hike on Thursday, increasing concerns of a recession.
Sterling dipped 0.33% to $1.2707 and was on course for a weekly loss of almost 1%, ending three consecutive weeks of gains.
"With the Bank of England set to raise rates substantially further, we expect the UK economy to come under renewed pressure by late 2023 and look for growth to either stagnate or even for the economy to contract," stated Nick Bennenbroek, international economist at Wells Fargo.
In addition, the Euro edged down 0.24% to $1.0929, whilst the US Dollar index rose 0.25% to 102.65 on Friday, on track for a weekly gain, ending three consecutive weeks of losses.
Elsewhere, both the Australian and New Zealand Dollars showed signs of a struggle in Asian trade as risk appetite weakened.
The Australian Dollar fell 0.9% to $0.6696, on course for a weekly loss of over 2.5%, the worst week since March, Reuters news agency reports.
While the New Zealand Dollar lost 0.59% to $0.61405, a 1.5% reduction for the week.
Hawkish comments and surprise rate increases from central banks around the world have stoked market fears that policy tightening will have to be ramped up further to curb inflation, despite the risks of a recession.
Indeed, Norway's central bank surprised markets on Thursday with a 50-basis point rise, and the Swiss National Bank also hiked rates by 25 basis points on Thursday.
"Markets are definitely taken by surprise by the recent, more aggressive actions that some central banks had to take," according to Khoon Goh, head of Asia research at ANZ.
"Also putting into question the following trend of other central banks that initially looked like they've paused but went on to hike rates … so that's something that markets are starting to become worried about again."