The dollar hit an eight-week low against the euro and a three-week trough on the yen today as disappointing US data in the previous session raised uncertainty as to how much US interest rates need to rise.
By 8 a.m., the dollar had fallen to $1.2296 compared with $1.2265 in late New York on Thursday. Against the yen it fell to 110.44, down a third of a per cent from the US close.
The yen was also helped by the Nikkei stock average which ended up 1.29 per cent on Friday, after gaining 1.85 per cent in the previous two days.
Analysts said disappointing figures for US jobs and economic growth released yesterday had sparked a liquidation of long-dollar positions that had been piling up on expectations the Federal Reserve would raise interest rates in June - making returns on the greenback less unattractive.
Investors are awaiting more US data releases due later, manufacturing survey and a final reading of the University of Michigan consumer sentiment survey ahead of a three-day weekend in Britain and the United States.
Some market players said the dollar also came under pressure from US investment banks' buying of yen ahead of a revision in the Morgan Stanley Capital Investment global equity index that will take effect at the end of Friday.