The dollar held firm on Thursday, supported by higher U.S. Treasury yields, as investors priced in the prospect of Federal Reserve rate hikes this year. The global focus was on a two-day summit between U.S. President Donald Trump and China's Xi Jinping.
Xi told Trump that trade talks were making progress but warned that disagreement over Taiwan could send relations down a dangerous path.
China's onshore yuan traded around three-year highs. In offshore trading, the currency strengthened for an eighth straight day against the dollar to 6.7845.
The dollar index stood at 98.48, up more than 0.6% for the week, heading for its strongest weekly performance since the start of the Iran war.
Against the yen, the dollar traded at 157.87, as the yen drew support from BOJ board member Kazuyuki Masu, who said the central bank should raise interest rates promptly if no economic slowdown.
Japanese authorities are believed to have intervened to temper the dollar's strength, but with traders pricing in Fed rate hikes, the yen is flagging.
Hot inflation data this week, including April's producer prices posting their biggest increase in four years, has bolstered rate hike expectations.
Carol Kong, a currency strategist at CBA, said the FOMC will likely start a tightening cycle from December this year with three hikes.
Markets now price a 31.8% chance of a December rate hike, up from 16% a week ago, according to CME FedWatch.
Long-dated U.S. Treasury yields hit their highest since mid-2025. Thirty-year bond yields were last at 5.029%.
The pound held steady against the dollar and euro after UK data showed growth expanded unexpectedly by 0.3% in March.
