The dollar strengthened as markets priced in a higher probability of further interest rate increases from the Federal Reserve. Sterling edged lower against the dollar in the move, with oil prices also cited as a factor underpinning the greenback, according to Investing.com's currency coverage.
The dollar's gain matters because a shift toward pricing in more Fed tightening changes the calculus for currency and rate-sensitive trades across markets, from emerging-market debt to gold. A firmer dollar also raises the cost of imports priced in other currencies and can pressure multinational earnings translated back into dollars.
What remains unresolved is how durable this repricing is heading into the week ahead, when investors will look for further data or Fed commentary to confirm or walk back the tightening bets currently reflected in currency markets.