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The dollar index, which measures the greenback against six major peers, was a shade higher at 96.133 after gaining about 1 percent over the previous five sessions.

On Jan. 10, the dollar almost fell below its 200-day moving average as the index touched a three-month low of 95.029. But then it bounced up, and stayed above that average.

The U.S. currency held onto its gains against the euro as persistent worries about the euro zone economy weighed on the single currency.

Data this week showed Germany barely avoided slipping into recession in 2018's second half, and European Central Bank chief Mario Draghi warned on Tuesday that economic developments in the euro zone have been weaker than expected.

The dollar was trading basically flat against the euro at $1.1388 after rising five straight sessions against the single currency, during which it gained about1.5 percent.

Catching investors' attention was a report in the Wall Street Journal that U.S. federal prosecutors were investigating Huawei Technologies, for allegedly stealing trade secrets from U.S. businesses and could soon issue an indictment.

Also in focus were concerns the U.S. government shutdown was starting to take a toll on its economy, while investors awaited more cues from the Federal Reserve after a growing number of its officials expressed caution about further rate hikes.

"There's a lot of speculation that we've seen the end to the rate-hike cycle and many people are even talking about rate cuts this year," said Bart Wakabayashi, Tokyo branch manager at State Street Bank.

"The immediate is going to be the messaging from the Fed plus of course their action," he said. "If we're assuming that the market is still long dollars, any sort of change in that is going to have a pretty lasting effect."

The U.S. central bank's Federal Open Markets Committee will hold the next policy-setting meeting on Jan. 29-30.

·       Labor markets tightened across the United States as businesses struggled to find workers at any skill level and wages generally grew moderately, the Federal Reserve said on Wednesday in its latest report on the economy.

A majority of districts also reported modest-to-moderate price increases, with a number saying higher tariffs had driven up costs.

The Fed reported that outlooks for the economy were generally positive, but added that many districts said contacts were less optimistic due to increased financial market volatility, rising short-term interest rates, falling energy prices, and elevated trade and political uncertainty.

·       The effect of the partial U.S. government shutdown, now in its fourth week, appeared to be muted while the information for the Beige Book was gathered.

The only mention of a shutdown-related impact came from the Chicago Fed, which said farmers and others were facing greater uncertainty due to the slowed release of government agricultural reports. Payments to farmers impacted by tariffs were also disrupted by the shutdown.

·       The Fed raised interest rates at its policy meeting last month, its fourth hike of 2018.

But with inflation showing no sign of rising above the Fed’s 2 percent target, and mounting worries about trade policy and slowing global growth, Fed Chairman Jerome Powell has said the central bank will take a “patient” approach to rate hikes this year.

And now, as the record-long government shutdown threatens growth further and the Fed begins preparing for its next policy meeting later this month, many of Powell’s fellow policymakers have echoed that sentiment.

·       European Union leaders on Wednesday called on Britain to give them a clear plan to split from Europe amid concern that the political chaos that led to a historic defeat for British Prime Minister Theresa May’s Brexit plan could lead to an uncontrolled departure.

European policymakers gave little ground on their insistence that any withdrawal deal adhere broadly to the principles of the one that was incinerated in the House of Commons. They said the onus was on British lawmakers to come up with a proposal — any proposal — that could win a majority at home, to form a basis for continued talks.

So far, Westminster appears unable to do so, with a clear majority agreeing on scenarios that would be unacceptable, and with no common vision for a path forward.

European leaders said they would not abandon their red lines — and their Irish allies — just to ease the life of an unruly departing member.

There was more openness to the possibility of extending the March 29 deadline.

·       Market focus is largely attuned to the latest Brexit developments, after Prime Minister Theresa May narrowly won a no-confidence vote late Wednesday.

May defeated the parliamentary motion by a margin of 19 votes.

Shortly after securing the votes needed to avoid a general election, May urged other party leaders to hold cross-party talks in an effort to break the current deadlock on a Brexit divorce deal.

An outline for a so-called “Plan B” is due by Monday, with market participants widely expecting Westminster to push for an extension of Article 50 past March 29.

·       China’s economy is expected to cool further this year as domestic demand weakens and exports are hit by U.S. tariffs, a Reuters poll showed on Thursday, reinforcing views Beijing will need to roll out more stimulus measures.

China’s economic growth is expected to slow to 6.3 percent this year, which would be the weakest in 29 years, from an expected 6.6 percent in 2018, according to median forecast of 85 economists Reuters polled. The economy expanded 6.9 percent in 2017.

·       “We expect the economy to soften further this year. Domestic headwinds are likely to stay strong,” analysts at Capital Economics said in a note.

“Output would only be slightly stronger if China avoided further tariffs. And the broader tensions around technology and national security are likely to stay high.” Sources told Reuters last week that Beijing is planning to lower its economic growth target to 6-6.5 percent this year from around 6.5 percent in2018.

·       Growth decelerated last year from 6.8 percent in the first quarter to an expected 6.4 percent in the fourth quarter. China will report its fourth quarter and 2018 GDP growth on Jan. 21 (0200 GMT). (For a more detailed Q4 poll click

Shock contractions in December trade and factory activity readings have fueled worries that economy is cooling more quickly than expected.

Investment growth has inched higher in the last few months as regulators fast-track infrastructure projects but it is still not far from record lows, while retail sales growth is the weakest since 2003 and the property sector looks wobbly.