CURRENCIES: Dollar Edges Higher Against Most Rivals

The dollar traded mostly higher in Asian hours Friday, building on the previous session's gains, but it lost further ground to the British pound.

The dollar bought 90.92 yen, up from 90.59 yen in late North American trading Thursday, while the euro bought $1.4917, down from $1.4933,

The U.S. dollar also bought 1.0335 Canadian dollars, up from 1.0333 Canadian dollars late Thursday.

But the greenback slipped against the British pound, which was at $1.6337, up from $1.6270.

A Bank of England policy maker signaled satisfaction with the impact of the central bank's money-creating quantitative easing program, speeding the British pound's rebound Thursday.

"We would caution against being short GBP [selling the British pound] when U.S. bank earnings are again generally beating expectations, as markets treat GBP as a proxy for the performance of the financial sector," said Adam Cole, global head of FX strategy at RBC Capital Markets in London.

"Our short-term models also continue to show GBP heavily oversold relative to short rate expectations and bank stocks, consistent with other evidence that short-GBP is a seriously overcrowded trade currently," he wrote in emailed comments.

The greenback also lost ground to the Australian dollar, with the Aussie rising to $0.9217, up from $0.9201.

Meanwhile, the People's Bank of China set the yuan's official rate 6.8270 against the dollar Friday, according to reports, down slightly from 6.8267 Thursday. The yuan is allowed to fluctuate on 0.5% on either side of the official daily rate.

China's foreign-exchange policy risks "unwinding" some of the progress made in reducing global trade imbalances during the financial crisis, the U.S. Treasury said Thursday in its latest report on foreign-exchange trading.

But the Treasury repeated its previous finding that China was not formally manipulating its currency.

On Thursday, the dollar headed lower versus the euro and British pound but remained up against the Japanese yen after a mixed bag of U.S. economic data.