The dollar was steady and on track for its first weekly loss in a month in early trading in Europe Friday, although it had recovered most of the ground it lost Thursday in reaction to some weak numbers from the U.S. manufacturing sector.
While the dollar's rally has run out of steam this week, neither the euro nor the British pound has been able to make significant headway against it because of their own home-grown problems: the Ifo survey of German business confidence, due at 04:00 AM ET (0900 GMT), is expected to fall to its lowest in nearly three years. Meanwhile the minutes of the European Central Bank’s last meeting, released Thursday showed a sense of urgency about preparing a new round of stimulus in the form of cheap long-term loans to banks, known as TLTROs.
Even so, many think that the ECB will choose to hold off from action at its next meeting on March 7.
"The eurozone still wobbles between solid domestic demand and increased external risks, and it remains unclear, in which direction the pendulum will eventually swing," said ING economist Carsten Brzeski in a research note.
At 03:20 AM ET (0820 GMT), the dollar index, which tracks the greenback against a basket of major currencies, was at 96.428. That's down around 0.5% from the high it hit earlier this week. The euro was at $1.1347, up 0.1% from Thursday’s close in Europe, while the British pound was at $.13033, down 0.1%.
Sterling is in a holding pattern ahead of next week’s Brexit showdown in parliament, when MPs will again get the chance to find a course of action they can agree on. Defections by lawmakers from both of the major parties have raised the pressure on Prime Minister Theresa May and opposition leader Jeremy Corbyn to find an acceptable compromise.
In Asia earlier, the Chinese yuan was steady, underpinned by reports that a memorandum aimed at stopping competitive devaluations is part of the deal that the U.S. and China are working on to resolve their trade differences. The USD/JPY pair was little changed at 110.75.