Dollar index inches up, but on track for weekly loss

The dollar index edged up 0.1 percent to 81.594 .DXY, having pulled up from a two-week low of 81.356 set on Thursday. At its current levels, the dollar index was still down about 0.7 percent for the week.

 The yen took a breather after having rallied on Thursday, when investors unwound yen-bearish positions, particularly versus the Australian dollar, in the wake of disappointing Australian jobs data.

 The dollar inched up 0.1 percent to 99.60 yen. The dollar rose to as high as 99.85 yen earlier on Friday, up from Thursday's intraday low of 99.00 yen.

 "It just looks like some short-covering," said a trader for a European bank in Tokyo, referring to the dollar's earlier rise versus the yen.

 Some market players cited the Japanese government's upgrade of its economic assessment in September as a supportive factor for the dollar versus the yen.

 The government raised its view on the economy for the seventh time this year because of rising capital expenditure, in another sign Prime Minister Shinzo Abe's reflationary policies are boosting growth.

 "It seems a step away from deflation. In my view, anything that seems to edge away from deflation pressures is more negative for the yen," said Mitul Kotecha, head of global foreign exchange strategy for Credit Agricole in Hong Kong.

 Traders said the greenback also gained some support as U.S. Treasury yields nudged higher. Then 10-year U.S. Treasury yield last stood near 2.931 percent, up from Thursday's U.S. close of 2.905 percent.

 The greenback was broadly firmer, with the euro easing 0.1 percent to $1.3283.

 The Australian dollar eased 0.2 percent to $0.9245. That was down from Thursday's three-month high of $0.9355, which had been set just before the weak Australian employment figures triggered

Read More: www.reuters.com/article/2013/09/13/us-markets-forex-idUSBRE97D0IN20130913