us dollar
American dollar notes are displayed. Reuters

The U.S. dollar gained against a basket of major currencies Friday for the second day, erasing a decline earlier this week after the Federal Reserve policymakers expressed concern about the impact of a strong dollar on the U.S. economy.

The dollar has surged about 10 percent over the past five months against a basket of currencies to reach a four-year high last week. On Friday, in late morning trading, it gained 0.3 percent, according to Bloomberg’s Dollar Spot Index that tracks the currency against 10 major counterparts.

Earlier this week a series of events set up the greenback for volatility. On Tuesday, the International Monetary Fund lowered its forecast for global economic growth to 3.8 percent in 2015 from the 4 percent it predicted in July. U.S. stocks fell sharply after the news.

Then on Wednesday, the Fed released minutes from its most recent meeting noting policymakers’ concerns that the dollar’s strength could slow a needed rebound in inflation. Investors have taken the Fed’s worries about the dollar as evidence that it will wait months, possibly until September of next year rather than July of next year, before raising interest rates, which would further strengthen the dollar. That sent the dollar down and stocks back up, but gains Thursday and Friday morning wiped out the decline.