The euro edged higher against the dollar in choppy trade on Friday, helped by speculation Spain may soon request financial aid to help ease the country's debt crisis. Volume was thin ahead of the weekend and traders said the euro may struggle to extend gains amid uncertainty over the timing of a potential bailout.
The euro rose 0.2 percent to $1.2988, having hit a session high of $1.3047 on Reuters data, not far from a four-and-a-half-month peak of $1.3169 set on Monday. The dollar slipped 0.1 percent to 79.324 against a basket of currencies, within sight of a six-and-a-half-month low of 78.601 hit last week in the wake of aggressive monetary easing by the Federal Reserve.
The dollar fell 0.1 percent to 78.14 yen, well below a one-month high of 79.21 hit on Wednesday after the Bank of Japan boosted its asset-buying program to support the country's economic recovery. Sterling rose to its highest in nearly 13 months against the dollar at $1.6310, helped by UK public borrowing data that was not as bad as expected. It was last at $1.6247, up 0.2 percent. The high-yielding Australian dollar climbed 0.3 percent to $1.0468.