The euro stabilized above US$1.26 after weak US manufacturing data, but the greenback found support ahead of a Federal Reserve meeting next week, traders said on Friday.
The euro bought US$1.2612 at 9pm GMT, against US$1.2626 late on Thursday in New York.
The US dollar was meanwhile trading at ¥118.66 against ¥118.17 on Thursday.
The Philadelphia business activity index, which measures manufacturing activity in the northeast US region, slumped to minus 0.7 this month from minus 0.4 last month, confounding market expectations for a solid improvement.
"The dollar has come under a good deal of pressure of late, courtesy of US economic data that have cast some doubt on the strength of underlying economic activity and associated inflationary pressures at a time of falling oil prices," said Simon Derrick, analyst at the Bank of New York.
"The damage to the dollar this week has been wrought by weaker than expected consumer and producer price data and particularly poor activity figures -- such as the October Philly Fed," he added.
However, traders said expectations that the Fed will hold US rates steady when it meets next Tuesday and Wednesday, and for the foreseeable future, revived buying interest in the dollar.
Attention would now shift to next week's US data, which include new and existing home sales, durable goods orders and third-quarter growth figures.
Friday's major mover was the pound, which rose to two-week highs against the dollar after strong third-quarter growth figures cemented expectations that the Bank of England will raise interest rates on Nov. 9.
British GDP grew by 0.7 percent in the third quarter from the second, in line with analysts' forecasts, and by 2.8 percent from a year earlier, the highest annual rate since the third quarter of 2004.
The pound bought US$1.8829 at 9pm GMT, from US$1.8781 late on Thursday.
The US dollar stood at 1.2591 Swiss francs, from SF1.2570.
The greenback rose against the New Taiwan dollar on the Taipei Foreign Exchange on Friday, gaining NT$0.003 to close at NT$33.202.
The US currency opened at NT$33.199 and fluctuated between NT$33.020 and NT$33.207.