The Bloomberg Dollar Index fell slightly on Friday, after a gauge of manufacturing activity rose for the second consecutive month in December. The CAD lagged behind other G10 currencies, with Sweden performing the best.

The Bloomberg Dollar Spot Index fell 0.2%, up 0.7% for the week, marking the fifth consecutive week of increases. The index rose 8% in 2024, partly due to market speculation that Trump's policies will spur inflation and economic growth.

Win Thin, global head of market strategy at Brown Brothers Harriman, stated that manufacturing appears to be in good shape.

Brad Bechtel, global head of Forex at Jefferies, mentioned, "There are several factors indicating that the dollar will strengthen, and future policies will continue to do so. I believe the market will continue to bet on dollar appreciation in the early part of this quarter."

EUR/USD rose 0.4% to 1.0301, after falling 0.9% on Thursday.

"Sentiment in Europe has begun to manifest in the markets, but there is room for further weakness in the euro," wrote Meera Chandan, co-head of global Forex strategy at JPMorgan. "We recommend increasing short EUR/JPY positions that have partially profited before, and continue shorting the euro against the CHF and USD." The bank's target is for the euro exchange rate to fall below parity in the first quarter, as it still expects the dollar to strengthen further.

USD/JPY fell 0.2% to 157.19;

AUD/USD rose 0.2% to 0.6217;

GBP/USD increased by 0.4% to 1.2427;

USD/CAD rose by 0.3% to 1.4445.