Euro currency notes
Euro currency notesReuters File

The euro hovered near a three-week high Friday, standing atop big gains made overnight after the European Central Bank roiled markets by suggesting that it was done cutting interest rates for now.

The safe-haven yen rose against the dollar as equities reacted negatively to the ECB's forward guidance, with Tokyo's Nikkei slipping 1.5 percent.

The ECB on Thursday rolled out a series of bold easing measures as expected, including an expansion in asset buying and a deeper cut to already negative deposit rates.

The euro rallied hard, however, after ECB President Mario Draghi undid the very stimulus he hoped to achieve by signalling there would be no further rate cuts.

The common currency was near the three-week peak of $1.1218 scaled overnight, when it jumped 1.6 percent against the greenback. German two-year bund yields posted their biggest daily rise in three months overnight, helping shore up the euro.

The dollar index suffered big losses on the euro's broad strength, struggling near a one-month low of 95.939 .DXY.

Draghi's suggestion that the ECB's easing steps may have limits was expected to temper investor confidence and hurt riskier currencies.

"The ECB's latest stance comes at a time when commodities and oil appeared ready for a corrective fall after their late gains," said Junichi Ishikawa, FX analyst at IG Securities in Tokyo.

"Risk aversion could be next week's theme, potentially pushing dollar/yen back towards 111.00 yen."

The dollar was down 0.3 percent at 112.835 against the safe-haven yen, well off this week's peak of 114.45 struck early on Thursday. The dollar fell to a 16-month low below 111 last month on a bout of global risk aversion.

The Australian dollar was little changed at $0.7460 after slipping 0.4 percent on Thursday.