The dollar held at its highest in nearly two months against a basket of major currencies early on Friday, on track for a third week of gains as investors awaken to the risk of a hike in U.S. interest rates as early as next month. New York Federal Reserve President William Dudley on Thursday said the U.S. economy could be strong enough to warrant a rate increase in June or July. His comments reinforced surprisingly clear signals of a possibly imminent rate hike in minutes of the Federal Reserve's April policy meeting and underpinned an already-firm greenback.

For potential cues the currency market awaited the G7 meeting of central bankers and finance ministers kicking off on Friday in the northern Japanese city of Sendai, although the event's potential impact may have lessened since the yen's bull run has ended.

The yen's surge to an 18-month high versus the greenback earlier this month had prompted threats of intervention from Japanese authorities. U.S. Treasury Secretary Jack Lew, on the other hand, said that he saw no "disorderly" moves in the market that warrants intervention. A standout performer was sterling, which rose broadly after a robust UK retail sales report diminished chances of an interest rate cut that some investors were factoring in.

EUR/USD: during the Asian session the pair traded in the range of $1.1195-10

GBP/USD: during the Asian session the pair traded in the range of $1.4590-05

USD/JPY: during the Asian session the pair climbed to Y110.10

Based on Reuters materials