The dollar steadied close to this week's seven-month highs against the euro and one-month highs against the yen on Friday, consolidating gains made on an increasingly upbeat view of the US economy. A weak US regional factory report on Thursday failed to dent a dollar rally which started earlier this month and has taken the greenback above ranges against the euro which had hemmed it in all year. "The market has been quiet today but people may want to continue to be a little bit long in dollars," said Adrian Schmidt, currency strategist at RBS Financial Markets.
The yen hardly budged after the Bank of Japan said that it would allow temporary breaches of a target it sets for funds in the banking system - a move analysts saw as technical fine-tuning that reflected healthier finances for Japan's banks.
The euro was slightly lower from late US levels at $1.2615 at 1140 GMT, not far from the seven-month lows around $1.2580 struck earlier in the week.
The dollar fetched 107.65 yen, unchanged from the US close and close to one-month highs set this week.
The Swiss franc weakened against the dollar and euro after Swiss National Bank deputy board member Thomas Jordan said on Thursday the risks in the Swiss economy were to the downside.
The dollar has risen by more than three percent against the euro and yen since May 6, when stronger than expected US April non-farm payrolls triggered a rally that gathered momentum following a narrower than expected trade deficit in March and strong April retail sales.
The data dispelled worries about a soft patch in the US economy and drove the dollar through key technical resistance levels.
The dollar shrugged off the Philadelphia Federal Reserve's index for business conditions in May, which fall sharply to 7.3, almost a two-year low, from 25.3 in April.
The BoJ kept its policy target - the amount of funds it provides to the banking system - at 30-35 trillion yen ($280-327 billion) but said it would allow a temporary breach below that level when fund demand was exceptionally weak.
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