By Alun John

HONG KONG (Reuters) – The dollar was firmer early on Friday, helped higher by upbeat economic data though was headed for its second week of declines while commodities currencies slipped as traders rejigged their positions after this week’s brisk rally.

Better jobs and housing data and rising U.S. Treasury yields helped the dollar rise towards the end of the U.S. session on Thursday, gains it held in Asian hours.

The dollar index was last at 93.736, up from the three-and-a-half week low of 93.494 it had touched a day earlier.

The late gains day on Thursday were broad-based with the euro, sterling and Aussie dollar all losing ground on the greenback.

However, the dollar index is down 0.18% for the week and set to post a second week of declines.

“People are wondering whether we are at an inflection point, as the dollar has been weakening and that doesn’t really fit with the broader narrative that global growth is cooling and the Fed is on the path to tapering, which should be supportive for the dollar,” said Paul Mackel, global head of FX research at HSBC.

On Friday, benchmark 10-year U.S. Treasury yields were at 1.6967% slightly off from Thursday’s multi-month high of 1.7%.

The commodity currency rally took a breather late on Thursday and into Asian hours on Friday, as traders took profits, analysts said.

The Canadian dollar slipped to C$1.2369 per U.S. dollar, off Thursday’s C$1.2287, a level last seen in June.

The Australian dollar also lost some ground, with the currency buying $0.7455, off Thursday’s three-month top.

“The ever aggressive intervention by China in coal markets has had a significant impact on pricing in the energy sector …so not surprised to see a reasonable A$ correction from very overbought levels,” said Westpac analysts in a note.

Brent crude, which had risen above $86 dollars a barrel on Thursday, tumbled late in the day, and was last at $84.66.

The British pound stood at $1.3784, also off a month peak hit earlier in the week.

The euro was at $1.1621 little changed, while the yen wobbled within sight of its multi-year lows, with one dollar worth 114.07 yen, compared with 114.69 earlier in the week, a four-year low.

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