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Investing.com-- The dollar steadied near a 19-month high on Friday amid increasing conviction that the Federal Reserve will raise interest rates in December-- a notion that pressured broader currency markets.

The Japanese yen tested lows last seen in September, drawing renewed threats of currency market intervention from Japanese authorities.

The euro steadied in early Friday trade, while the pound fell 0.06%.

Markets held back before a wave of key economic indicators from China and Japan due next week. The Chinese yuan's USD/CNY pair moved little on Friday but was in sight of recent four-year highs.

Dollar near 19-mth peak, set for strong week as rate hike bets grow

The dollar index and dollar index futures steadied on Friday, but were close to their highest levels since early-2025 amid growing bets on a December interest rate hike by the Fed.

The greenback was set to add 0.8% this week, its third straight week of gains.

Producer price index inflation for October is due later on Friday, with any signs of sticky inflation likely to further the case for more rate hikes by the Fed. The central bank has largely maintained its annual inflation target of 2%, spurring bets that more rate hikes will be needed to meet the target.

Beyond the PPI data, several Fed policymakers are also set to speak on Friday.

Yen teeters on the brink of intervention risk

Top Japanese currency diplomat Atsushi Mimura on Thursday said it was "too early to forget" September's intervention.

Weakness in the yen comes chiefly from growing bets that a gulf between Japanese and U.S. interest rates will persist in the coming months, even as the Bank of Japan prepares to further raise rates.

The Singapore dollar's USD/SGD pair was flat but was close to its highest level since end-July, while the South Korean won's USD/KRW pair fell 0.3%.

The Indian rupee's USD/INR pair rose 0.1% but remained well below recent record highs, as a drop in oil prices aided the currency.

Euro caught in a vise

Dollar near 19-mth high on rate hike bets; yen back on intervention watch

Japanese yen tests 160 again, drawing intervention threats

Dollar scales fresh 19-month peak, yen hits 160 for first time since September

The Australian dollar's AUD/USD pair fell slightly on Friday and came close to its weakest levels in 2026.

Broader currency markets dithered on Friday, given that higher U.S. rates herald more pressure on high-yielding, risk-heavy currencies, given that they tend to narrow the gap between yields on the relatively safer dollar.

Japanese gross domestic product data for the third quarter is due next week, as is key consumer price index inflation data for October. Both prints are likely to factor into the BOJ's plans for rates.