The dollar firmed for a second straight session on Friday after three consecutive days of losses, bolstered by safe-haven bids on worries about the health of the global economy with slow-downs evident in Europe, Japan, and China.
The dollar index, however, a measure of the greenback's value against a basket of major currencies, was still on track to end the week on a negative note, its first in 13 weeks. The index was also on pace for its largest weekly fall in six months.
In midmorning trading, the dollar index was up 0.4 percent on the day at 85.842.
The euro, meanwhile, slumped on concerns about the region's economic weakness, specifically Germany. Worries about the euro zone were echoed by European Central Bank President Mario Draghi, who said on Friday that a slowdown in the euro zone's economic momentum could weigh further on the reluctance of companies and households to invest.
The euro fell 0.5 percent to $1.2619, but was still likely to end the week with its strongest weekly gain since April.
Against the , the dollar was flat at 107.81, but was on course for its biggest weekly loss in seven months.
Global growth worries, which sent stocks and commodities down across the board, pushed the safe-haven yen to a five-week high against the euro. The drop in oil prices to a four-year low below $90 took its toll on the Norwegian crown.
Norway's currency, which has a strong correlation with oil prices, sank to its weakest in three weeks against the euro as September inflation data also dipped below forecasts. The euro was 0.4 percent up at 8.2450 crowns.
All of that has made markets much more jittery as seen in a jump in the CBOE volatility index, a measure of investor anxiety, to highs not seen since early February.
Analysts said the pickup in volatility means the dollar's road higher is likely to get bumpier.
Societe Generale strategist Kit Juckes said the dollar had rallied too far, too fast since July, on the back of strong data and a small change in the U.S. Federal Reserve's language.