NEW YORK (MarketWatch) -- Concerns about U.S. growth kept the U.S. dollar under pressure, as the European single currency eyed a test of the $1.30 level and the Japanese yen continued to benefit from its safe-haven status. Meanwhile, the euro (CUR_EURUSD 1.2967, +0.0039, +0.3017%) rose just above $1.30 and recently traded at $1.29685 compared with $1.2906 in late North American trading on Thursday. The bounce marks a dramatic rebound from below $1.19 last month. The dollar index (DXY 82.25, -0.31, -0.37%) , which tracks the U.S. unit against a basket of six major currencies, dropped to 82.176 from 82.550 late Thursday. The British pound (CUR_GBPUSD 1.5379, -0.0060, -0.3886%) fell to $1.5391 from $1.5410 late Thursday. See MarketWatch's currencies page. The dollar stayed down after a report showed U.S. consumer prices fell 0.1% in June, in line with analyst expectations. Core prices, excluding food and energy, rose slightly more than predicted but the year-over-year rate remains very low historically and points to a bigger risk of deflation - falling prices -- than inflation. Read about CPI report. That removes one potential reason for the Federal Reserve to raise interest rates, which would support the dollar. U.S. economic data still to come include the Treasury Department's report on capital inflows to the U.S. in May and the University of Michigan's preliminary consumer-confidence reading for July. At the same time, the euro is benefiting from a number of factors, said Marco Annunziata, chief economist at UniCredit Group. These include a "paradoxical" situation, he said. Despite the fact that the recovery in the U.S. is clearly more robust than in the euro zone, the Fed "sounds more dovish and seems to be toying with the idea of a renewed wave of quantitative easing, whereas the [European Central Bank] sounds cautiously more optimistic and short-term market rates have tentatively begun to edge up," he said. Prompt UK Gas and N Sea Crude Surge To 2010 Highs While a number of bullish and bearish drivers have kept crude oil futures prices pinned in a fairly narrow trading range for months, European physical prices for prompt U.K. gas and North Sea crude shot to their highest levels for 2010 this week Investors also appear to be gaining confidence in the policy measures that individual euro-zone governments have undertaken to address the crisis and rein in deficits, while Asian investors appear more comfortable taking on sovereign-credit risk within the euro zone, he said. The European banks stress tests due for publication next week, however, remain the "make-or-break challenge" for the euro, Annunziata said. In the European and Asian sessions, trading was driven largely by "risk aversion and technical flows" ahead of U.S. economic data set for release later in the day, said Boris Schlossberg, director of currency research at GFT. Against the Japanese yen, the dollar (CUR_USDYEN 86.6100, -0.8100, -0.9266%) fell to ¥86.79 from ¥87.40 Thursday. Japan's Nikkei stock index fell sharply in Asian trading hours as the dollar/yen fell temporarily below the ¥87.00 level. Downbeat U.S. economic data have served to push back expectations for a rate hike by the U.S. Federal Reserve, leaving U.S. bond rates to fall to fresh yearly lows. Low yields are serving to weigh on the dollar versus the yen, Schlossberg said.

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