The greenback sank on Friday as traders worried that continued volatility in the US financial system may lead to the Federal Reserve cutting interest rates sooner than planned.

The dollar index that gauges the US dollar versus its major pairs sank by 0.2% at 101.23, post slipping over 0.6% in the earlier session.

The Federal Reserve of the United States boosted interest rates on Wednesday, but signalled that it was nearing the end of its year-long aggressive tightening cycle by deleting the phrase "anticipates" more rate hikes from its accompanying statement.

EUR/USD soared by 0.3% to 1.1038, ECB raised its benchmark interest rate by 25 basis points the day before, with President Christine Lagarde indicating the continuous of the strict policy.

GBP/USD edged up by 0.5% at 1.2630, touching the highest level in one year, where BOE is still struggling with taming the soared inflation.

USD/JPY slipped by 0.1% to 134.08 on a weak trading day for holiday.