The dollar rose today to extend its recent gains while the euro was headed for its worst weekly performance since November 2016 after the global stock market sell-off squeezed investors positioned for a weaker greenback. 

Betting on a weaker dollar versus the euro has been one of the most popular trades this year. 

A resurgent European economy has fuelled expectations the European Central Bank will shrink its balance sheet sooner than expected. 

After earlier rising, the euro slipped and was down 0.1% at $1.2234, bringing weekly losses to 1.7%. 

So far this year, the euro remains 2% higher and had hit hit a three-year high of $1.2538 in late January.

More broadly, the dollar against a basket of currencies was up 0.3% and has now gained 1.4% this week, the best performance since November 2016. 

But the US currency remains down 1.8% this year.

Analysts said that unless there was a fundamental shift in the health of the global economy, which this week's downturn in equity markets did not imply, the dollar remained in a multi-year downward trend. 

The slump in stock prices continued in Asia and Europe on Friday.