Talk of Britain dramatically reworking trade ties with the European Union after Brexit sent the pound tumbling to two-month lows.
The dollar rose on Friday, boosted by a US jobs report, but was headed for a second straight weekly loss after tumbling the day before.
Some of the biggest gains on record for China's yuan sent currency markets spinning.
Investors were cautious about increasing bets on the greenback before getting fresh clues on the U.S. economy.
Dealers and investors in London returned to push the greenback to within 1 percent of December's long-term highs.
Singapore's economic growth surged in the fourth quarter, rising 1.8 percent from a year earlier, handily beating forecasts.
The dollar recovered from a two-week low against a basket of six major currencies.
Weaker-than-expected economic data weighed on the greenback and waning risk appetite boosted Japan's safe-haven currency.
The U.S. dollar hit its highest level in two months against the sterling on Wednesday on concerns over next year's Brexit negotiations.
The dollar inched up against the yen on Wednesday after upbeat U.S. economic data reinforced expectations for economic growth.
The dollar headed into the Christmas break on Friday just over half a percent off highs hit after this month's Fed meeting.
The greenback was set to stay strong, with the Fed potentially hiking rates more than expected, said Roy Teo, senior FX strategist at ABN AMRO Bank.
The dollar dipped for a second day as traders booked profits ahead of a batch of U.S. data later in the day.
The dollar took a breather from its run since the November 8 U.S. presidential election.
The Singapore dollar tumbled to its weakest since 2009, during the global financial crisis, and it may have further to go.
The dollar was boosted by Fed comments that kept alive market expectations for a faster pace of U.S. interest rate hikes next year.
It’s time to buy actively managed funds, instead of index funds, as assets that long in lockstep will move to a different drum, BNP Paribas said.
The yen jumped on Monday on safehaven bids following news the Russian ambassador to Turkey was gunned down in the Turkish capital.
The dollar edged higher on Friday, holding near 14-year highs touched after Wednesday's Federal Reserve meeting.
The dollar surged to its highest level in 14 years on Thursday on anticipation of a more hawkish Federal Reserve.