Dollar Nears Two-Week High Amid Strong U.S. Economic Data

The U.S. dollar hovered near a two-week high against the yen following strong U.S. economic data that eased recession fears. This led to a surge in Treasury yields and lifted risk-sensitive currencies. Traders remain focused on the Federal Reserve's upcoming rate decision. Meanwhile, other currencies such as sterling and the Australian dollar also gained.

The U.S. dollar maintained its proximity to a two-week high against the yen on Friday, driven by solid U.S. economic data that alleviated recession concerns.

A surge in Treasury yields further bolstered the greenback, reducing expectations for aggressive Federal Reserve rate cuts next month. Risk-sensitive currencies like sterling performed well as an improved economic outlook spurred a rally in equities.

While the dollar index marginally declined by 0.12% to 102.92, it followed a significant 0.41% rally overnight. Market participants remain focused on the Federal Reserve's rate decision on Sept. 18. Meanwhile, sterling, the euro, and the Australian dollar also showed gains amid positive economic data.