By Kevin Buckland

TOKYO (Reuters) – The dollar wallowed near its lowest level in a week versus major peers on Friday, as improved risk sentiment wiped out recent gains amid easing concerns about contagion from a potential China Evergrande Group default.

Risk appetite returned, lifting oil and global equities, even as hawkish comments from the Bank of England pushed up yields globally, with those on hitting the highest since July overnight at 1.437%.

However, that did not help the greenback as the, which measures currency against six competitors, eased slightly to 93.068 on Thursday. It had dropped 0.36% to 92.977 on Sept. 17. The index suffered a loss of gains over the past week and fell 0.16%.

“Risk sentiment was unperturbed by the move in yields, instead taking its lead from news around Evergrande,” Tapas Strickland, an analyst at National Australia Bank (OTC:), wrote in a client note.

Chinese authorities are preparing restructuring teams to ease fears of another Lehman’s moment.

Beijing announced that it will pay interest on an offshore bond and infused fresh money into its financial systems on Thursday. Evergrande, the embattled property company, was also in action. However, there is no information yet on whether coupon payments were made on the dollar bonds that had to be paid on Thursday. More are due next week.

The mood did improve, however, as it weighed on safe havens such as the Japanese yen, and lifted commodity-linked currencies, like the Australian dollar.

The yen dropped 0.05%, to 110.385 per $1 after hitting 110.435 earlier in the day. It was at its weakest point since September 8.

After a nearly one-month low at $1.16835, the euro rose 0.05% to $1.1743, indicating that it is continuing to recover from Thursday’s record high of $1.16835.

The rose 0.21% to $0.73105, and earlier touched a one-week high of $0.73165.

The sterling traded at $1.3734 with 0.07% more, close to its previous session high of $1.3750.

Two of the BOE’s policymakers voted to end pandemic-era government bonds buying early. Markets also raised expectations about an increase in interest rates to March.

After jumping to an 1 1/2 month high at 8.5552, the crown of Norway was unchanged at 8.5754 per $1. This occurred after Thursday’s increase in benchmark interest rates by the central bank. It also stated that more increases will be coming over the next months.

The Federal Reserve had said that it may reduce its monthly bond purchases as early as November and that the interest rate could increase faster than anticipated by next year.

Strickland, NAB’s chief economist said that “the hawkish sounds from the BOE/Norgesbank reinforces the Fed’s dot tilt.”

The Bank of England seemed to be open to increasing interest rates before the end of this year.

On Friday, several Fed officials will speak, including Chairman Jerome Powell who opens the Fed Listens event.