The dollar stopped the rot yesterday after heavy falls caused by a sharp slump on Wall Street on Thursday, but remained under pressure as the euro and yen ended the week as they started it - strongly.

Sterling meanwhile forged upward, pushing through the $1.62 threshold, thanks to official data hinting at a buoyant economy enjoying a healthy recovery.

The euro stood at $1.0700 in late deals yesterday from $1.0714 on Thursday evening. The yen meanwhile pushed up to 114.82 to the dollar, its highest level since mid-February, from 115.17 a day earlier.

The dollar struggled to recoup the heavy losses triggered on Thursday by the 1.65 per cent slump on Wall Street. Fears of renewed inflation and the higher interest rates this will imply were reinforced by higher second-quarter employment cost data that sent investors fleeing for cover.

Wall Street opened slightly higher but traders were still preferring to back the euro and yen rather than take dollar positions ahead of the weekend.

The euro and yen have both been encouraged by glimpses of better economic performance in their respective economies recently.

The single European currency gained impetus from data that showed French unemployment fell in June by 18,000. On Thursday, the European currency was boosted by French figures showing that businesses expected to see the pace of activity accelerate further in the coming months.

The yen held firm despite numbers showing that unemployment in Japan had reached a record 4.9 per cent in June.

The market is eyeing the 115 yen level as a possible threshold below which dealers could push the Bank of Japan into renewing its intervention tactics designed to prevent the currency from appreciating too strongly, analysts say.