The dollar rose to a one-week high against the yen on Friday, once again buoyed by expectations that US President Donald Trump would deliver on his campaign promise to put policies in place to further bolster an economy that has improved but has sputtered at times. The greenback has climbed for two straight days, pulling it back from seven-week lows against a basket of currencies on the view that it would gain from a rise in border tariffs, tax reform and future spending.
Karl Schamotta, director of global product & market strategy at Cambridge Global Payments in Toronto, said there was a "growing conviction that Trump's campaign promises are likely to be borne out in reality."
Increasing expectations of tax reforms and fiscal stimulus, which support the dollar, are temporarily easing concerns of trade protectionism, he said.
"The heavily abstracted threat of a trade war is unlikely to shake investor confidence until the reality arrives," Schamotta said.
The dollar briefly wobbled after advance data showed US economic growth slowed more than expected to 1.9 percent in the fourth quarter due to weak exports. The market was expecting growth of 2.2 percent.
The economy grew only 1.6 percent in 2016, the weakest pace since 2011.
In midmorning trading, the dollar was up 0.4 percent against the yen to 114.96. It rose against sterling, which fell 0.2 percent to $1.2569.
The euro, however, gained 0.3 percent against the dollar to $1.0710, leaving the dollar index slightly higher on the day at 100.42.
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