The dollar edged down against the euro on Friday but found broad support from growing expectations the Federal Reserve will keep raising interest rates despite devastation wrought by Hurricane Katrina. Tokyo traders also braced for the results of a general election in Japan on Sunday that is widely expected to keep Prime Minister Junichiro Koizumi in power and push ahead his reform agenda. Although it dipped on Friday, the dollar was up about 1.7 percent against the euro since hitting a three-month low last Friday, and has regained around 1.7 percent versus the yen since slumping to its lowest level in two and a half months earlier in the week. Those lows were struck on concerns about the impact of Katrina on the U.S. economy and worries the Fed could pause from lifting rates on Sept. 20 after tightening at all of its meetings since June 2004. Such concerns have eased following a chorus of comments by top Fed officials that the best way to help the U.S. economy recover from Katrina is to keep inflation in check. Still, some analysts said it was difficult to pave a direction for major currencies due to a host of uncertainties facing the market. "Whether it's the results of the Japanese election and its economic implications or the outlook for U.S. interest rates, it's impossible to know for certain how they're going to pan out," said an analyst at a Japanese trust bank. "So there's not a lot of direction in the market right now." Some dealers had started to tilt toward a U.S. rate rise in September while acknowledging that a hike this month would not guarantee additional tightening through the end of the year. Traders said the market remained mindful of soaring oil prices and an expected deterioration in the budget deficit due to massive post-hurricane reconstruction. "There's two camps fighting over whether we think the dollar's going to benefit or lose ground," said Luke Waddington, head of forex trading at Royal Bank of Scotland in Tokyo. "This sort of second guessing will continue until we actually see what the real impact of the situation is going to be on the U.S." Some market participants expected the yen would benefit should Koizumi gain a majority in the powerful lower house in the upcoming election. Others said the dollar could get a lift if investors who had been betting on Koizumi's victory and buying the yen started to unwind their yen holdings.