Dollar Climbs to Six-Week High as Risk Appetite Dims Read more: Dollar Climbs to Six-Week High as Risk Appetite Dims

The U.S. dollar scaled six-week peaks against the euro Friday as concerns about the global economy spurred a return to the greenback's safety.

The flight away from risky trades in commodities, stocks, and high-yielding currencies could well be a major driver for the dollar in the week ahead as global economies struggle to get back on track.

The dollar sold off sharply this year and traders believe the currency's rally may have further to go.

"It's not just the dollar coming back but everybody is getting a haircut this morning," said David Watt, senior currency strategist, at RBC Capital Markets in Toronto.

"Oil prices are down, equities off, and risk off. With the dollar being beaten so badly, a bounce makes sense."

He also cited nervousness about the global economic recovery, adding that while Europe has positive economic numbers with its strong gross domestic product data, it doesn't drive global growth.

One of the biggest losers on Friday was the euro, which fell across the board on track for its worst two-week performance in one year. European Central Bank President Jean-Claude Trichet did most of the damage to the euro when he said inflation was at a peak in an interview with Spanish TV, suggesting uncertainty about the pace of future rate hikes in the euro zone.

Investors also refocused on euro zone debt issues ahead of meetings by finance officials in Brussels.

A meeting of Eurogroup finance ministers, followed by an Ecofin meeting of EU finance ministers Monday, could provide further direction to the single currency and the euro is likely to remain pressured until at least after investors digest any outcome.

In early afternoon trading, the euro was 0.9 percent lower on the day at $1.4112, after hitting a session low at $1.40650 on trading platform EBS.

Over the last two weeks, the euro has declined 7.3 percent, its weakest showing since mid-May last year.

The euro, however, hit a session peak at $1.43 after strong first-quarter GDP data from the euro zone's biggest economies, Germany and France, prompted demand from Asian sovereign names, European real money accounts and leveraged funds.

That bolstered expectations a healthy euro zone economy will keep interest rates higher than their U.S. equivalents. By contrast a report showed U.S. consumer prices rose as expected in April, giving little sign of a broader pick-up in inflation that would trouble the Federal Reserve.

In other currencies, weakness in commodities triggered a decline in commodity-lined currencies. The Australian dollar fell 0.9 percent to US$1.0578, while the New Zealand currency sank 1.1 percent to US$0.7866 .