European stocks were in the red, while Japanese shares, with which the yen has an inverse correlation, posted their third weekly loss in the past month. The yen usually gains when riskier assets lose.
Analysts said the dollar could come under renewed pressure versus the yen if the U.S. 10-year yield falls further, after its breach of a recent trading range. The drop in U.S. yields on Thursday caught some by surprise. Traders pointed to funds moving to safety after a sell-off in Greek bonds halted a rally in peripheral euro zone debt.
Euro slips, eyes periphery
The sell-off in the periphery's bonds, if it gathered pace, was likely to hurt the euro, traders said.
The euro fell 0.1 percent to trade near $1.37. Against the yen, the euro was down 0.3 percent around 138 yen, having fallen to 138.77 yen, its lowest in three months.
The euro was down about 0.5 percent for the week against the dollar, putting it on track for its second straight weekly decline. Indeed, the euro has fallen 2.2 percent since May 8 when European Central Bank President Mario Draghi told markets the bank was ready to provide new stimulus next month.
The disappointing growth figures on Thursday heightened those expectations and some investors are betting that the euro could grind lower in coming weeks.
Reflecting this, the implied one-month volatility in the euro/dollar, the expected price swings over the coming month, has picked up this week from 7-year lows, to trade at 5.8 percent on Friday.
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