The U.S. dollar declined against its major rivals on Friday, as U.S. bond yields fell and traders look ahead to the Federal Reserve's monetary policy meeting, due next week.
The Fed is expected to keep its short-term interest rates near zero, where it has been since late 2008.
The policy makers are expected to once gain debate about keeping the rates at near zero level for a considerable time at the December 16-17 meeting.
Some economists expect that the Fed would cease referring to maintaining interest rates at a low level for a "considerable time" in their policy statement. Otherwise, the Fed is expected to back its view that it is probably on course to raise interest rates after mid-2015.
Low inflation rate is not expected to prevent the Fed from its willingness to tighten policy, especially in light of continued improvement in labor markets.
Meanwhile, recession in Europe and slowdown in China and other countries could serve as a lid to recent acceleration in economic growth.
The U.S. producer price index for November and University of Michigan consumer sentiment index for December are due today, to gauge the strength of the U.S. recovery.
The U.S. bond yields are trading lower, with 10-year yield down by 0.053. Treasury yields move inversely to prices.
The greenback declined to 0.9642 against the Swiss franc and 1.2453 against the euro, after advancing to 0.9698 and 1.2383,respectively in early deals. Continuation of the greenback's downtrend may take it to support levels of around 0.95 against the franc and 1.26 against the euro.
The greenback reversed from an early 2-day high of 0.7769 against the kiwi and fell to 0.7840. Next key support for the greenback may be found around the 0.795 level.
Having advanced to 119.20 against the yen and 0.8240 against the Australian dollar previously, the greenback eased to 118.04 and 0.8298, respectively. The greenback is likely to test support around 115.00 against the yen and 0.85 against the aussie.
The greenback that gained to 1.5694 against the pound at 3:45 am ET eased back, trading at 1.5719. At yesterday's close, the pair was worth 1.5729. If the greenback extends slide, 1.585 is likely seen as its next support level.
U.K. construction output declined unexpectedly in October, data from the Office for National Statistics revealed.
Output in the construction industry declined 2.2 percent from September, confounding expectations for a 0.7 percent rise.
