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• The dollar edged higher against a basket of major currencies on Friday, extending its recovery from a three-year low last week, as the potential for a more aggressive U.S. Federal Reserve prompted investors to pare bearish bets against the greenback.

The dollar index .DXY, which measures the greenback against a basket of six other major currencies, was up 0.12 percent at 89.847. The index hit a three-year low of 88.253 on Feb. 16.

Rising U.S. Treasury yields, a view that the dollar’s selloff had been overdone, and minutes from the Fed’s January rate-setting meeting that offered a relatively upbeat tone helped the index notch a gain of 0.8 percent this week.

• U.S. government debt yields fell Friday amid of a report on monetary policy and speeches from the Federal Reserve.

The yield on the benchmark 10-year Treasury note, which hit a four-year high of 2.95 percent earlier in the week, was lower at around 2.871 percent at 4:02 p.m. ET.The 30-year Treasury bond yield was lower at 3.158 percent. Bond yields move inversely to prices.

The two-year Treasury note yield, which hit a 2008 high earlier in the week, was also lower Friday. Some of the strength in bonds appeared to come from late-week purchasing.

• Federal Reserve policymakers are fretting that they could face the next U.S. recession with an arsenal of policies little different from that used in the last downturn but robbed of much of their punch because interest rates are still low.

The U.S. Federal Reserve, looking past a recent stock market sell-off and concern about inflation, said it sees steady growth continuing and no serious risks on the horizon the might pause its planned pace of rate hikes.

• The Federal Reserve should raise U.S. interest rates three or four times this year, John Williams, president of the San Francisco Federal Reserve Bank, said on Friday, adding that the next rate hike should take place in “the near future.”

• The Fed is widely expected to raise rates when policymakers meet next month. Williams is a voter on monetary policy this year.

• The Federal Reserve should stop shrinking its balance sheet when it gets down to a level somewhere higher than $2.9 trillion, said New York Fed President William Dudley on Friday.

Prior to the financial crisis, the Fed’s balance sheet was just over $800 billion. Asset purchases during the recession designed to spur growth pushed the balance sheet up to $4.5 trillion.

• The U.S. Federal Reserve could begin to reassess its current monetary policy approach later this year but the threshold for changing to an alternative would be high, Cleveland Federal Reserve President Loretta Mester said on Friday.

“It may be appropriate later this year to begin an assessment of our current monetary policy framework and alternatives,” Mester said in prepared remarks to a conference of central bankers and economists in New York.

• The Fed rocked the markets in the past week, and there's a risk it could do so again when Fed Chair Jerome Powell speaks for the first time to Congress.

• Powell delivers his semi-annual economic testimony before House and Senate committees Tuesday and Thursday, in his first major appearances as chairman.

Tuesday - 10:00 a.m. Fed Chair Jerome Powell testifies before House Financial Services Committee on economy.

Thursday - 10:00 a.m. Fed Chair Powell testifies before Senate Banking Committee.

• A former senior official in Donald Trump’s 2016 presidential campaign, Rick Gates, pleaded guilty on Friday to conspiracy against the United States and lying to investigators, and he is cooperating with a federal probe into Russia’s role in the election.

• The Democratic minority on the U.S. House of Representatives Intelligence Committee on Saturday released a response to Republican charges that the FBI and Justice Department have abused the law in their investigation of possible ties between Russia and Donald Trump’s 2016 presidential campaign

• The United States said on Friday it was imposing its largest package of sanctions to pressure North Korea to give up its nuclear and missile programs, and President Donald Trump warned of a “phase two” that could be “very, very unfortunate for the world” if the steps did not work.

• China reacted with anger on Saturday to new U.S. sanctions aimed at increasing pressure on nuclear-equipped North Korea, saying the unilateral targeting of Chinese firms and people risked harming cooperation on the problem.

The sanctions’ targets include a Taiwan passport holder, as well as shipping and energy firms in mainland China, Hong Kong, Taiwan and Singapore. The actions block assets held by the firms and individuals in the United States and prohibit U.S. citizens from dealing with them.

• The United States said on Friday it will open its embassy to Israel in Jerusalem in May, a move from Tel Aviv that reverses decades of U.S. policy and is bound to trouble U.S. allies who have already objected.

U.S. President Donald Trump announced last December that the United States recognized Jerusalem as Israel’s capital, infuriating even Washington’s Arab allies and dismaying Palestinians who want the eastern part of the city as their capital.

• The Bank of England might need to raise British interest rates somewhat sooner than Deputy Governor Dave Ramsden had expected if wage growth picks up early this year, according to a newspaper interview released on Saturday.

“We all will keep a close eye on what happens through the early part of this year to see if that (BoE) forecast of wage growth picking up to 3 percent is realised,” Ramsden was quoted as saying by the Sunday Times

• Oil prices rose on Friday to their highest in more than two weeks, supported by the shutdown of the El Feel oilfield in Libya and upbeat comments from Saudi Arabia that an OPEC-led effort to cut stockpiles is working.

Brent crude futures rose 92 cents to settle at $67.31 a barrel, a 1.4 percent gain. The global benchmark’s session high of $67.37 was its highest since Feb. 7.

West Texas Intermediate (WTI) crude futures rose 78 cents to settle at $63.55 a barrel, trading between $62.33 and $63.73.

Reference: Reuters, CNBC