The dollar rose from a seven-month low against the yen on Thursday as U.S.-Japan trade talks avoided a foreign exchange scare, while it gained slightly against other currencies ahead of the long Easter holiday.

The dollar has been battered this month as the U.S. threatened, imposed and then delayed massive tariffs, denting confidence in U.S. economic growth and stability.

The Swiss franc's nearly 8% gain since April 2 is the biggest among G10 currencies and at 0.8167 per dollar, it is close to testing resistance at a decade-high of 0.81.

The euro and yen are not far behind with gains of nearly 5% against the dollar in more than two weeks, leaving both overdue for a pullback. The euro was slightly lower at $1.1362 in the Asian morning, though it is still on track for a fourth straight weekly rise, even with the European Central Bank widely expected to cut interest rates by 25 basis points later on Thursday.

The dollar touched a seven-month low of 141.62 yen in early Asian trade before bouncing back to 142.61 after Japanese Economy Minister Ryosei Akazawa said foreign exchange was not on the table in trade talks in Washington.

The yen had strengthened ahead of the meeting on hopes the countries could agree to strengthen the yen against the greenback. But with the yen hovering at its highest since 1986, gains could be reversed if no deal is reached.

The dollar index rose to 99.6 to trade more or less steady for the week.

Trading is likely to be lighter ahead of Easter, with many markets closed on Good Friday and some closed on Easter Monday. Overnight U.S. retail sales rose by the most in more than two years and Federal Reserve Chairman Jerome Powell appeared in no rush to cut interest rates.

But the dollar selling momentum continued.

"We do not view this as proper de-dollarization and see no real risk to the USD's reserve currency status," analysts at Citi, led by G10 rates chief Daniel Tobon, said in a note.

"However, the world is overweight U.S. assets," they said. "Ultimately, these 'sell America' flows could weigh heavily on the USD this year."

In the note, Citi expects the euro to peak around $1.20 in the next six to 12 months, before the dollar can start to recover.

The dollar's decline has knocked the New Zealand dollar out of its recent range and has done nearly the same for the Australian dollar. The kiwi was above its 50-day and 200-day moving averages at $0.5912 on Thursday, although it failed to advance much further despite a very high inflation reading as rising prices appear transitory and unlikely to derail a rate cut.

The Aussie was down 0.4% at $0.6343, with a rebound in jobs data not really shaking market expectations for a rate cut in May.

Sterling was down at $1.3216, capped by a weaker-than-expected inflation reading on Wednesday. (Newsmaker23)

Source: Reuters