The dollar fell against rival currencies on Friday on the back of weak factory inflation data, while the euro was firm after the European Central Bank hinted that it could be bracing for a reduction in its massive monetary stimulus.
The dollar index, which tracks the greenback against a basket of six major rival currencies, dropped to 91.814. A move below the Jan. 2 low of 91.751 would put it at its lowest since Sept. 20.
The index was poised to lose 0.2 percent for the week, weighed down by recent data that showed U.S. producer prices dropped for the first time in almost 1-½ years in December, which could dampen expectations that inflation will pick up this year.
Against the yen, the dollar was nearly flat on the day at 111.27 JPY, after tumbling a six-week low of 111.05 yen on Thursday.
The greenback remains 1.6 percent lower for the week in which the Japanese currency jumped as a routine operational cut in bond purchases by the Bank of Japan caused speculation that the central bank would unwind its massive stimulus.
The euro rose 0.2 percent to $1.2050, approaching its almost four-month peak of $1.2089 set last week. It was 0.2 percent higher for the week.
The common currency rallied on Thursday, after ECB policymakers said in minutes of the bank's December meeting that they could revisit their communication stance early this year, raising expectations that they are preparing to trim their monetary stimulus program.
Investors took the relatively hawkish statement as a further signal that the ECB will taper its 2.55 trillion euro ($3.07 trillion) bond buying scheme in 2018 if Europe's economy continues to accelerate.