Sterling gained on Tuesday after the British economy created jobs at its strongest rate in nearly a year in the three months to November, potentially undermining the case for a Bank of England interest rate cut next week.
The pound fell on Monday after comments by UK finance minister Sajid Javid stoked fears about weak ties between Britain and the European Union following the country's departure from the bloc.
The U.S. dollar slipped against the safe-haven Japanese yen on Friday as investors fretted over concerns that a spreading virus from China would curb travel and hurt economic demand.
Sterling retreated on Friday after initially strengthening, as some investors still expected an interest rate cut next week even though business surveys pointed to a post-election bounce in the British economy.
The dollar rose to its strongest level of 2020 on Monday after last week's run of data confirmed that the U.S. economy is holding up well, while China's yuan briefly hit a new six-month high.
Speculators cut their net long bets on the U.S. dollar in the latest week to the smallest position in 19 months, according to calculations by Reuters and U.S. Commodity Futures Trading Commission data released on Friday.
The greenback rose to a one-week high against the euro on Friday as economic data pointed to solid economic growth, and reduced fears about an impending slowdown.
The pound gave up early gains on Friday after UK retail sales data came in weaker than expected, prompting investors to price in a greater chance interest rates would be cut at the end of this month.
The dollar gained on Thursday after multiple data releases painted a positive U.S. economic picture, reversing earlier weakness following the preliminary deal between the United States and China to de-escalate their trade war.
Sterling edged up on Thursday, hitting its highest level of the week as investors paused their ramping-up of bets on the Bank of England cutting interest rates later this month.
The dollar pared losses but remained lower against the euro and the yen on Wednesday after the United States and China signed a deal to de-escalate their trade war.
Sterling fell on Wednesday after data showed UK inflation rose at its weakest rate in three years, ramping up expectations of a rate cut from the Bank of England at its January meeting.
China's yuan weakened on Tuesday and the Japanese yen reversed earlier losses after a report that the United States will keep tariffs on Chinese goods through the U.S. election hurt risk sentiment.
The Swiss franc hit its strongest against the euro in almost three years on Tuesday after the United States added Switzerland to its watchlist of currency manipulators.
The British pound recouped some losses after dropping to its lowest in weeks on Tuesday amid concerns about the state of the economy and talk of a possible cut in interest rates this month.
The U.S. dollar index held steady on Monday before a heavy week of economic data, while sterling was the weakest performer after tepid growth increased the likelihood that the Bank of England will cut interest rates this month.
Sterling fell sharply on Monday, slipping further below $1.30, after data showed Britain's economy grew at its weakest annual pace in more than seven years in November and raised the chances of a cut to interest rates.
The U.S. dollar edged lower from four-week highs against the safe-haven Japanese yen and slipped versus the Swiss franc on Friday as possible renewed U.S.-Iran tensions weighed on market sentiment.
The pound edged lower on Friday, holding near two-week lows against the dollar as a second policymaker joined Bank of England governor Mark Carney in signalling a potential rate cut.
Foreign exchange investors are increasingly betting that bushfires which have torched a swathe of Australia the size of South Korea will hurt the country's economy, and some are short-selling the Australian dollar in anticipation it will fall.
Britain's pound will gain more than 3% against the dollar this year, supported by interest rate differentials and hopes for a smooth departure from the European Union, a Reuters poll found on Friday.
The U.S. dollar, which has dominated currency market trading for the last two years, looks set to do so again in 2020, according to the latest Reuters poll of foreign exchange strategists.
The Swedish and Norwegian currencies are expected to remain stable against the euro this year and strengthen moderately against the U.S. dollar, a Reuters poll of foreign exchange strategists showed on Friday.
The safe-haven yen fell to two-week lows against the dollar on Thursday, as the United States and Iran moved away from an all-out conflict, prompting investors to take on more risk and shift focus to an upcoming U.S.-China trade deal and a U.S. non-farm payrolls report.