The dollar rose, getting a lift from fatter Treasury yields and investor anxieties about policy shifts from the ECB.
Subdued euro zone inflation data kept expectations of aggressive European Central Bank monetary stimulus alive, much of which is priced in.
The euro fell against the dollar on speculation of further monetary stimulus from the European Central Bank.
The yen levelled off on Friday but still looked set to rack up its best gains for months after a jumbled week of currency moves.
The U.K. economy will expand at its fastest rate this year since 2007, according to forecasts by the BCC out on Friday.
The dollar neared a two-month high against major currencies, pausing after rallying due to a hold in sterling and the euro's fall.
The leader of the UK Independence Party claims the UK cannot stop 'known criminal gangs' from countries like Romania entering the country.
The euro fell to a three-month low on Wednesday as expectations solidified for an ECB attack on monetary policy next week.
While the U.S. can't claim that it might be losing a friend with Russia's pivot east, it might be a different story for the dollar.
The British pound sank on Tuesday after weak lending data added to concerns over a European election win for the anti-EU UKIP party.
The euro recovered early losses on Monday after European election results saw gains for Eurosceptics but did not deliver a serious domestic blow to some European governments.
The euro fell to a three-month low against the dollar after a soft German business sentiment survey added pressure on the ECB.
Robust expansion in Germany led the euro off lows, but growing expectations the ECB will ease monetary policy next week kept gains muted.
The Federal Reserve released minutes from its last meeting, where it discussed the procedures for hiking interest rates.
Adam Cole, head of currency strategy at RBC, says he is "constructive" on sterling.
Henry Dixon, U.K. equity portfolio manager at GLG, and Chris Turner, head of FX strategy at ING Financial Markets, discuss the strength of sterling and whether it is time to take profits.
The Australian dollar fell more than half a percent, on a slide in prices of iron ore, one of the country's biggest exports.
The dollar teetered near a three month low against the yen on Monday, hit by falling U.S. interest rates.
The dollar extended losses against the yen, trading near two month lows and putting it on course for a big weekly loss.
The euro was back against the dollar on Friday, rebounding from a 2-1/2-month trough as investors booked profits on bearish positions.