The dollar firmed on Friday, boosted by increased expectations of monetary easing by central banks in Europe and Japan, and by strong US housing data. The dollar touched a two-week high against the yen, which has risen nearly 3 percent versus the greenback this year as the sell-off in oil and global equity markets has pushed traders to seek out the safe-haven currency. The dollar rose 0.7 percent to 118.50 yen.
The euro fell below $1.08 to the dollar for the second time in as many days, nearing a two-week low. The euro zone common currency was last down 0.5 percent to $1.0818. Investors "are still very much watching three or four different things from other markets, not least China and US equities," said Alan Ruskin, global head of FX strategy at Deutsche Bank in New York. "But the biggest mover and most influential by far, in the last 24 hours at least, has been the recovery in crude oil."
Currencies tied to oil production, such as the Canadian dollar, were stronger. The loonie rose 0.8 percent, and was headed for its second straight day of big gains against the greenback. The US dollar got a bounce mid-morning from data showing US existing home sales jumped a record 14.7 percent in December. Sales rose 6.5 percent for the whole of 2015, making it the strongest year since 2006.
After European Central Bank chief Mario Draghi said the bank would need to review policy in March, which was read in the market as a promise of more easing, sources familiar with the Bank of Japan's thinking said the market turmoil could lead it to consider more asset purchases.
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