The dollar struggled to make more headway on Friday after a jump in U.S. job creation left stock markets in optimistic mood but did not convince traders it would be a trigger for the U.S. Federal Reserve to move toward higher interest rates.
Sterling, not for the first time in recent months the main weekly winner on major currency markets, was back on the verge of almost six-year highs against the dollar.
The dollar's failure to launch has been the big disappointment on currency markets this year. Solid U.S. jobs numbers for the fifth month running backed the analysts who have begun again to predict it may take off in the coming months.
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Against that, the euro continues to be backed by inflows of cash into European bond and stock markets and also by talk in the market of buying by Asian central banks recycling the dollar reserves they are accumulating into other currencies.
After a half-cent swing after the jobs numbers on Thursday, the dollar was just over 0.1 percent higher against the euro on Friday.
"You're getting this sort of muted reaction maybe because no-one is that convinced these numbers will really change the Fed's outlook," said Daragh Maher, a strategist with HSBC in London.
"It played reasonably well yesterday as a dollar positive, but the scale of the move has not been so big. It has gained, just not that much."
Maher drew parallels with the recent play on sterling, driven higher by investors' conviction that strong U.K. economic numbers would eventually prompt the Bank of England to shift to a more hawkish tone on interest rates.
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That seems to have happened in the past month, with Governor Mark Carney and colleagues hinting that the bank could even raise rates for the first time before the end of the year. Fed chief Janet Yellen, however, for now has offered little sign of heading in the same direction.
"It seems as though people are slightly more reluctant to take on the Fed in the way we saw with the Bank of England," Maher said. "But maybe there comes a tipping point with data like this where the message has to change."
Crown down
After some early sales of euro in European time, the dollar touched its highest in a week at $1.3587 per euro. Against a trade-weighted basket of currencies it was last at 80.279, having climbed as far as 80.315 after the jobs numbers.
Against the , it hovered near a two-week high at 102.06. It was up 0.7 percent so far this week, on track for its best performance in 2-1/2 months.
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The Swedish crown crashed 2 full percentage points in value on Thursday after the country's central bank slashed its interest rates by a half point to just 0.25 percent and gave a dim outlook on growth that hinted more might be in the pipeline.
Poor industrial output numbers added to concerns about the prospect of deflation in Sweden and prodded the crown a further 0.3 percent lower on Friday.
"The Riksbank acted decisively against Swedish deflation risks yesterday (but) given the zero lower bound, the Swedish krona needs to weaken a lot further," said Alvin Tan, a strategist with French bank Societe Generale in London.
"Despite the recent fall in the crown, it remains too high in trade-weighted terms, whether in real or nominal terms. The Riksbank needs a weaker krona, and it has historically been willing to pursue unconventional policies in extremis."