The dollar pared losses against the yen, but was still on track to notch its biggest daily loss against the Japanese currency in eight months.
The dollar index briefly popped, holding about 0.2 percent higher, before holding slightly lower.
The dollar weakened against major currencies after weaker-than-expected U.S. economic data reinforced views that the Fed would take a dovish stance.
The U.S. dollar slipped against the yen on Monday as traders took profits from the greenback's recent rally against the Japanese currency.
The yen hit a 2 1/2-week low against the dollar on a report said the Bank of Japan was considering helping banks by applying negative rates.
The dollar recovered against the euro after ECB meeting as traders focus on next week's Fed meeting.
Commodity-linked currencies such as the Australian and Canadian dollars inched towards recent peaks on Wednesday.
Commodity currencies like the Australian and New Zealand dollars soared to 10-month highs against the U.S. dollar.
Commodity currencies slipped while the safe-haven yen gained ground after major crude exporters failed to agree on an output freeze.
The dollar fell broadly as a slide in oil prices ahead of weekend talks among producers in Doha.
The dollar fell against the yen on Thursday, snapping two days of gains, hurt by data showing benign U.S. inflation.
The dollar climbed to a two-week peak against the euro, as gains in stock markets and improved data out of China drew investors into riskier bets.
The dollar rebounded from a more than seven-month low against a basket of currencies, led by gains versus the safe-haven yen.
The dollar pared losses after hitting 17-month lows against the yen on Monday.
The yen struggled across the board after posting gains this week, weighed by warnings overnight by the Japanese finance minister.
The U.S. dollar fell below 108 yen for the first time in 17 months on Thursday.
The U.S. dollar hit a fresh 17-month trough against the yen on doubts that the BOJ would intervene to halt the yen's appreciation.
The yen soared to its highest in 17 months against the dollar as sentiment in stock and commodity markets soured, with crude oil retreating.
The U.S. dollar hit its lowest against the yen in two weeks on continued expectations of a slow path of Fed rate hikes this year.
The dollar turned higher on Friday after a better-than-expected U.S. nonfarm payrolls report was released.