The dollar spiked on Friday, on mounting hopes that a government shutdown will be prevented, the euro reversed its recent gains due to fears that a global trade war could trigger a severe economic slump in the region.

The dollar index that gauges the greenback versus its major pairs edged up by 0.2% higher to 103.982, It has climbed further from Tuesday's bottom of 103.21, marking its lowest level since mid-October.

The U.S. dollar has dropped over 4% this year, pulling back from the six-month peak reached in January, as concerns over the Trump administration’s trade policies fueled fears of a potential U.S. recession.

Attention today is centred on the release of the Michigan consumer sentiment index for March later in the day.

EUR/USD dipped a bit at 1.0851, falling further from Tuesday’s five-month high, the market was shaken by the EU-U.S. trade dispute and concerns over Germany's difficulty in passing a large spending plan.

GBP/USD dropped 0.1% to 1.2937, pulling back from Wednesday’s four-month peak, following growth data that revealed the U.K. economy shrank in January.

USD/JPY added 0.8% to 148.95, the Japanese yen was impacted by a local media report indicating that the Bank of Japan has no immediate plans to raise interest rates in May.