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U.S. Dollar Spikes Up Against Majors

The U.S. dollar strengthened against its major counterparts in Asian deals on Friday in response to Federal Reserve Chair Janet Yellen's statement that the central bank would maintain accomodative monetary policy for some time, in order to stimulate growth.

"Our objective in monetary policy is to continue to maintain an accommodative monetary policy for as long as necessary to see recovery of the labor market" and reach maximum employment, Yellen said during a Senate Budget Committee hearing on Thursday.

Yellen repeated her statement that the U.S. economy was on track for "solid recovery" after a harsh weather that temporarily hurt business activity. But weakness in the housing sector could challenge recovery, Yellen warned.

"Interest rates are unlikely to begin rising until we are in a strong economic recovery," Yellen noted.

The Fed Chair reiterated that the central bank's swollen balance sheet would gradually decline, after the Fed determines to begin tightening monetary policy. "We'll probably wait until we are in the process of normalizing policy to decide just what our long-run balance sheet will be," Yellen added.

The greenback recovered to 101.75 against the yen from an early low of 101.54. The next possible upside target for the greenback is seen around the 102.00 zone. The pair was worth 101.64 at yesterday's close.

The greenback climbed to 1.3831 against the euro for the first time since May 5. If the greenback extends gain, it is likely to eye resistance around the 1.375 region. At yesterday's close, the pair was worth 1.3838.

The greenback that closed yesterday's deals at 0.8800 against the franc approached a weekly high of 0.8811. If the greenback extends gain, it may find resistance around the 0.885 mark.

The greenback approached a 3-day high of 1.6915 against the pound, up from Thursday's closing quote of 1.6929. Key upside target level for the greenback is seen around the 1.68 zone.

Looking ahead, German trade data, U.K. industrial production and trade data - for March are due in the European session.

Canada jobs data for April and U.S. wholesale inventories for March are set for release in the New York session.

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