The U.S. dollar weakened on technical falling. The U.S. Dollar Index, a measure of the dollar against a basket of major currencies, fell by 0.5 percent to 101.02 as of 1945 GMT.
The dollar sagged early on Friday against its peers as investors were cautious ahead of a looming U.S. jobs report that could set the tone in coming days.
The dollar fared slightly better against the yen. The U.S. currency was flat at 113.990 yen after rising to a near 10-month high of 114.830 the previous day, and on its way for a 0.6 percent weekly gain.
The euro rose 0.7 percent overnight after Reuters reported the European Central Bank will extend its bond purchases beyond next March and consider sending a formal signal next week that the asset purchase programme will eventually end. It last stood little changed at $1.0659 and enroute to rise 0.8 percent on the week.
Americans filed for U.S. unemployment benefits last week at the fastest pace since June, indicating a possible pause in progress in the labor market. Jobless claims increased by 17,000 to 268,000 in the week ended Nov. 26, seasonally adjusted Labor Department figures showed Thursday in Washington
U.S. factory activity accelerated to a five-month high in November amid a pickup in new orders and production, suggesting that the manufacturing sector was regaining its footing after a prolonged slump.
The ISM said its index of national factory activity rose 1.3 percentage points to a reading of 53.2 last month, the best since June. A reading above 50 indicates an expansion in manufacturing, which accounts for about 12percent of the U.S. economy.
Oil prices surged as much as 5 percent on Thursday, with Brent crude at its highest in about 16 months, extending gains after OPEC and Russia agreed to restrict output to reduce the global supply glut more quickly.
Benchmark Brent crude for February was up $2.13, or 4.1 percent, at $53.97 a barrel by 2:43 p.m. ET (1943 GMT), after hitting its highest level since July 27, 2015. On Wednesday, the expired January Brent contract ended up 8.8 percent at $50.47.
U.S. light crude oil settled up $1.62, or 3.3 percent, to $51.06 a barrel. It earlier rose to $51.80, testing a 2016 high of $51.93. The contract ended Wednesday's session up 9.3 percent.
Reference: Xinhua, Bloomberg, Reuters, CNBC