FOREX-Dollar rides yield surge as Middle East and trade wars raise inflation stakes

In other currencies, the Australian dollar AUD= was little changed at $0.6968, having fallen more than 0.4% overnight, while the New Zealand dollar NZD= edged 0.08% higher to $0.5776, after sliding 0.8% in the previous session.

Investors now head into next week facing a slew of major central bank decisions including from the Federal Reserve, where policymakers must contend with mounting inflationary pressures even as the Fed has pared back its forward guidance.

"Removing forward guidance or being less generous with forward guidance, our read on that is that that is an actual tightening of financial conditions without actually having to hike rates," said Leonard Kwan, a fixed-income portfolio manager at T. Rowe Price.

"Because what you are doing is you are introducing a little bit more uncertainty, you are retaining optionality within the Fed to be to move in any direction they want. So what that actually means for risk takers is that there's a potential for more volatility to come out from Fed events."