The dollar inched up against the yen ahead of meetings at the Bank of Japan and the Fed which investors expect to be dollar-positive.
The dollar index also hit its highest level since March.
The dollar fell after a six-week high against the yen, while the Euro showed little change after ECB keeps policy unchanged.
UBS WM's Wayne Gordon says the Fed might hike rates as soon as December because of improving U.S. data, which might lead to an unwinding of carry trades.
The dollar hit a four-month high against a basket of currencies, bolstered by strong U.S. data and expectations of Fed rate rises.
The dollar rose against a basket of major currencies after U.S. housing starts rose by more than expected in June.
The Yen slips broadly as Turkey quells an attempted military coup, while calm in UK prompts sterling bump.
The British pound could be showing signs of a false dawn, according to currency analysts, who suggest that a recent rally could soon give way to more bouts of heavy selling.
The dollar spiked against the Turkish lira after gunfire was heard in the capital of Ankara on Friday.
The Bank of England surprised market by holding fire on post-referendum rate cut.
The dollar falls while the Bank of Canada announced that it will hold interest rates.
The dollar eased slightly against the yen on Wednesday, but remained close to 2-1/2-week highs.
The yen fell against the dollar after the Japanese ruling coalition's victory boosted hopes for more monetary stimulus.
The dollar traded in a back-and-forth range after the U.S. June jobs report easily beat expectations.
Sterling rebounded on Thursday after falling two straight days.
The safe-haven yen hit a 3-1/2 year high against sterling on fears about the impact of Brexit.
The Japanese yen rose almost 1 percent against the euro and dollar while sterling fell to new long-term lows.
The Aussie recovered from a wobbly start as commodities rose on expectations that central banks are likely to provide more stimulus.
The Bank of Israel bought "hundreds of millions" of dollars of foreign currency, dealers said, after the shekel continued to strengthen.
Australia faces political uncertainties such as a credit rating downgrade and possible policy paralysis, explains TD Securities's Annette Beacher.