The dollar approached new highs against the euro in Europe as comments from Federal Reserve official William Poole assured the markets of a possibility that US interest rates will continue to increase.

The euro fell to $1.2884 from $1.2920 in New York late Friday. The dollar rose to 108.20 yen from 107.50 yen.

St. Louis Federal Reserve Bank President William Poole said, referring to the rise in the greenback since the latest rate hike: ’’ The market reaction to the statement ``made a lot of sense.’’

"The risk of higher inflation over the next six months or so seems clearly greater than the risk that inflation will fall below a desirable range," Poole also said, prompting that the Fed can raise rates higher if inflation picks up.

Against the yen, dollar has approached a a five-and-a-half month high no concerns about the possible slump in the performance of the Japanese economy as the Bank of Japan’s Tankan economic report revealed a decrease in Japanese business sentiment.

The dollar took a dip Monday on the news of a smaller-than-expected March payrolls number, regaining strength on the news of a rise in hourly wages.

"Sure, the jobs data was a little weak, but we’re in the middle of a fairly dollar-bullish trend right now," said Toshiaki Kimura, forex manager at Mitsubishi Trust and Banking Corp.

"As long as expectations for further U.S. rate hikes remain its going to be a bit hard to dump the dollar."

The employment report indicated the appearance of 110,000 non-farm jobs in the U.S. economy generated in March, against economists’ forecasts of 220,000 new jobs. Hourly wages added 0.3%.