NEW YORK: The dollar slipped against the euro and yen Friday after two straight days of solid gains fueled by the Federal Reserve's decision to cut stimulus for the improving US economy.
The euro bought $1.3671 around 2200 GMT, up from $1.3661 at the same time Thursday.
The dollar dropped to 104.06 yen from 104.22, while the euro also weakened against the Japanese currency, edging down to 142.31 yen from 142.41.
After the dollar's sharp gains in the past two days, traders "were wanting to leave for the weekend without being too exposed and booked profits," said Sebastien Galy of Societe Generale.
John Kicklighter, chief currency strategist at DailyFX, warned of volatility risks associated with low volumes amid the year-end holiday period, but predicted the dollar would benefit from the Fed's stimulus taper.
"The dollar stands to reap significant benefit from stimulus moderation as we have seen relative monetary policy (a politically-correct name for 'currency wars') sets the greenback on a positive track," Kicklighter said in a research note.
"And, should there be a shakeup in risk as investors shed some of their excessive leverage, the dollar stands to only amplify those gains. Between now and the return of full liquidity, beware the high volatility often associated to low liquidity," he said.
The dollar slipped against the Swiss currency, to 0.8958 france from 0.8979 Thursday.
But the greenback rose against the pound, which fell to $1.6332 from $1.6371.
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