The Bloomberg Dollar Index fell on Friday, driving the index to its largest weekly decline in eight months. The Japanese yen, Swiss franc, and British pound led the gains against the dollar. The Bloomberg Dollar Spot Index dropped 0.7% on Friday; it declined 1.6% for the week, marking its biggest drop since May. Traders are accelerating their hedging against dollar volatility, with the cost of one-month options contracts tied to the index climbing to its highest level since last September. US consumer confidence rose to a five-month high in January, as Americans grew more optimistic about the economy and their personal financial situations. Recent data points to robust growth in the US economy, leading markets to see only a minimal chance of an interest rate cut next week. "This week's dollar weakness was primarily driven by concerns over geopolitical risks," said Andrew Hazlett, a foreign exchange trader at Monex Inc. He also stated that, given the recent economic data, "I don't believe the Fed will take any action next week." The USD/JPY pair fell 1.7%, its largest drop since August 1st, to 155.78, reaching its lowest level since December. The yen gained during the US trading session after traders reported that the New York Federal Reserve had contacted financial institutions to inquire about the yen's exchange rate. Wall Street interpreted this as a potential signal that the Fed is prepared to assist Japanese authorities in directly intervening in the foreign exchange market to support the yen. The USD/CAD pair fell 0.6% to 1.3700. The Canadian dollar found support from rising oil prices. Oil prices advanced as traders factored in the possibility of potential US military action against Iran. The GBP/USD pair rose 1% to 1.3634; the USD/CHF pair fell over 1% to 0.7807.