The Dollar continued to edge down from a 10-month top on Friday yet remained on track for its largest quarterly gain in a year.

The Dollar index – measuring the greenback against six peers – declined 0.4% to 105.75 at the time of writing but was on course to end Q3 up 2.8%, along with an 11th consecutive weekly rally, the longest in nine years.

US Treasury yields, which were providing support for the Dollar, dropped from multi-year highs overnight, which has helped USD turn positive for the year against almost every major currency, Reuters reports.

"We've had resilience in the US economy, in the jobs market, inflation ticking higher and, obviously, the rise in oil prices. There's a lot in play here," said City Index markets strategist Fiona Cincotta.

"We're not really expecting to see any rate cuts for quite some time, well toward the back end of 2024. And also, the Fed might not want to adopt a less hawkish tone because they don't want to unwind that work they've done too early," she continued.

Elsewhere, the Euro increased for a second day, gaining 0.4% at $1.0608, moving further away from the multi-month low of $1.0488 earlier this week.

The Pound also edged up 0.2% to $1.2236, after falling to its lowest since 17th March, as data out on Friday revealed the UK's economic performance since the start of the pandemic has been more robust than previously envisaged.

According to the Office for National Statistics (ONS), Britain's economy in the second quarter this year was up 1.8% compared to Q4 2019, the last full quarter before the onset of the pandemic, the Reuters report adds.

A prior estimate by the ONS last month forecast the economy was down 0.2% compared to before the Covid crisis.