woman holds us dollar banknotes in this illustration taken may 30 2022 reutersdado ruvicillustration tokyo july 15 reuters  the dollar hovered below a near twodecade high in asian trading on friday having slipped overnight after two federal reserve policymakers said they favored a smaller rate rise than the 100 basispoints that investors were betting on the dollar index which measures the currency versus six counterparts edged 007 higher to 10865 after reaching and then falling back from the highest since september 2002 at 10929 on thursday traders had ramped up bets that the fed would go for a supersized tightening at their july 2627 meeting after data on wednesday showed consumer price inflation racing at the fastest pace in four decades read more but those bets were pared after fed governor christopher waller and st louis fed president james bullard both said they favored another 75 basispoint hike for this month in spite of the inflation figures read more fed funds futures currently indicate a 31 chance of a 100 basispoint increase down from around 70 before the comments even with the pullback the dollar index is on track for a third winning week up 158 from last friday on both bets for an increasingly aggressive fed and as worries about a resulting recession fueled demand for the currency as a safe haven momentum remains with the us dollar said sean callow a currency strategist at westpac predicting scope for the dollar index to top 111 in coming weeks the fomc will have to remain hawkish both at the july meeting and beyond solidifying us dollar yield support against the yen the dollar eased 009 on friday to 13881 but was up 2 for the week and touched 13938 overnight for the first time since september 1998 as us treasury yields widened the gap to their japanese counterparts the bank of japan has been steadfast in its commitment to ultraeasy policy to support the economy and is widely seen keeping stimulus settings steady at a meeting next week the euro was flat at 10019 after bouncing back from below parity on thursday for a second day the single currency dipped as low as 09952 after italian prime minister mario draghi offered to resign but that was rejected by the countrys president read more the euro zone is struggling with a worsening energy crisis as russia shut down a gas pipeline for regular weeklong maintenance leaving markets jittery about whether it will come back online with russia saying it will depend on demand and sanctions read more despite the uncertainty the european central bank is likely to stick the quarterpoint rate increase it has flagged for next week but the outlook trails well behind the fed supporting the dollars strength versus the euro meanwhile sterling edged 012 higher to 11840 after slumping to a 28month low of 11761 overnight it is down 157 since last friday heading for its worst week since early may as political turmoil casts a shadow over the currency the risksensitive australian dollar added 01 to 06755 shrugging off data showing a sharperthanexpected decline in economic growth in key trading partner china read more the aussie dropped to a twoyear low of 066825 on thursday and is headed for 143 weekly loss