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NEW YORK: The dollar was on track for its biggest daily percentage gain against a basket of major currencies in a week on Friday, as uncertainty over beleaguered Chinese property developer Evergrande helped the greenback bounce back from a sharp decline in the prior session.

China Evergrande Group owes $305 billion and has run short on cash, missing a Thursday deadline for paying $83.5 million and leaving investors questioning whether it will make the payment before a 30-day grace period expires. A collapse of the company could create systemic risks to China's financial system.

The safe-haven dollar had its biggest one-day percentage drop in about a month on Thursday after Beijing injected new cash into the financial system and Evergrande announced it would make interest payments on an onshore bond.

The decline came a day after the greenback was lifted by Wednesday's announcement from the US Federal Reserve that it will likely begin to trim its monthly bond purchases as soon as November and flagged interest rate increases may follow suit sooner than expected as the central bank moves away from its pandemic crisis policies.

"We are in one of the situations, and this doesn't always happen, where the dollar is the beneficiary of multiple ideas," said Joseph Trevisani, senior analyst at FXStreet.com.

"The US economy does look better than most of it competitors, there is lingering fear out there over Evergrande and what else is out there in the rather untransparent Chinese economy and political system, plus the Fed appears finally ready."

The dollar index rose 0.291%, with the euro down 0.25% to $1.1707.

Kansas City Fed President Esther George said the US labor market has already met the central bank's test to pare its monthly bond purchases, and the discussion should now turn to how its massive bondholding could complicate the decision on when to hike rates.

In prepared remarks in a listening session with a wide swath of economic players, Fed Chair Jerome Powell did not elaborate on his own economic or monetary policy outlook, which he had outlined at the close of the two-day Fed meeting on Wednesday. Sterling weakened a day after hawkish comments from the Bank of England on Thursday pushed the pound to its biggest one-day percentage gain since August 23. Cryptocurrencies slumped after China's most powerful regulators increased the country's crackdown on the digital assets, with a blanket ban on all crypto transactions and crypto mining. Bitcoin, the world's largest cryptocurrency, last fell 6.12% to $42,154.72.

Smaller coins, which generally move in tandem with bitcoin, also dropped. Ether last fell 8.43% to $2,888.00 while XRP last fell 7.2639757% to $0.93.

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