At a press conference on Thursday, ECB President Christine Lagarde said the bank is not targeting exchange rates. She also struck a less dovish tone on the euro zone economy, as the ECB lifted its growth forecast for 2020.
After Lagarde's briefing, sources said policymakers had agreed to look through the euro's rise, judging it was broadly in line with economic fundamentals.
On Friday, however, ECB policymakers, including chief economist Philip Lane, warned against complacency over low inflation and highlighted risks from a strong euro, nuancing the bank's benign message from a day earlier.
Since around mid-June, the euro has risen more than 6% versus the dollar.
"There is a feeling here that it's okay for the euro to be around $1.1750-$1.1850. If it hits $1.1950, it probably starts swinging down," said Juan Perez, currency trader at Tempus Inc in Washington.
"Overall, ECB policymakers seem to be saying that let's not overreact about the euro exchange rate," he added.
In afternoon trading, the euro rose 0.2% to $1.1831
The dollar index <=USD>, which tracks the greenback against other major currencies, was flat to slightly lower at 93.320. The index though showed a second week of gains.
The dollar was little changed against the yen at 106.10 yen
Friday's data showing a rise in U.S. consumer prices last month had little impact on the dollar. U.S. consumer price index rose 0.4% last month, after gains of 0.6% in June and July.
Overall, some analysts believe the dollar has scope for further gains as a safe haven amid still heightened uncertainty related to the COVID vaccine and the global recovery from the virus-induced downturn.
"We are concerned that the consensus may be too optimistic on the global economy; too optimistic on a vaccine; too pessimistic on the COVID-19 situation in the U.S. compared with that in Europe; and complacent on the U.S. elections," said BofA Securities in a research note.
Elsewhere, the pound slipped 0.1% against the dollar to $1.2794
As the Brexit saga intensifies, sterling posted its worst weekly performance versus the dollar since mid-March when forex markets were going through a coronavirus-induced turmoil.
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Currency bid prices at 2:59PM (1859 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR= $1.1830 $1.1813 +0.14% +5.53% +1.1874 +1.1814
Dollar/Yen JPY= 106.1000 106.1300 -0.03% -2.54% +106.2600 +106.0700
Euro/Yen EURJPY= 125.55 125.37 +0.14% +2.94% +126.1200 +125.3900
Dollar/Swiss CHF= 0.9094 0.9104 -0.11% -6.03% +0.9108 +0.9080
Sterling/Dollar GBP= 1.2790 1.2803 -0.10% -3.54% +1.2864 +1.2765
Dollar/Canadian CAD= 1.3189 1.3190 -0.01% +1.56% +1.3207 +1.3151
Australian/Doll AUD= 0.7275 0.7256 +0.26% +3.58% +0.7305 +0.7252
ar
Euro/Swiss EURCHF= 1.0759 1.0758 +0.01% -0.86% +1.0788 +1.0754
Euro/Sterling EURGBP= 0.9247 0.9225 +0.24% +9.39% +0.9291 +0.9211
NZ NZD= 0.6659 0.6649 +0.15% -1.16% +0.6694 +0.6642
Dollar/Dollar
Dollar/Norway NOK= 9.0506 9.0729 -0.25% +3.10% +9.0768 +9.0035
Euro/Norway EURNOK= 10.7112 10.7200 -0.08% +8.86% +10.7335 +10.6684
Dollar/Sweden SEK= 8.7810 8.7598 +0.29% -6.05% +8.8003 +8.7302
Euro/Sweden EURSEK= 10.3907 10.3609 +0.29% -0.75% +10.4125 +10.3559
(Reporting by Gertrude Chavez-Dreyfuss; Editing by Stephen Orlofsky and Marguerita Choy)
By Gertrude Chavez-Dreyfuss