The dollar fell slightly on Friday as a Federal Reserve official's seemingly dovish remarks and uninspiring data on the U.S. economy doused the sanguine mood from earlier this week.
The euro rebounded from a two-week trough, and the dollar fell to its low on the day against the Japanese yen after comments from New York Fed President William Dudley. Seen as one of the most important members of the Fed's rate-setting committee, Dudley said the central bank was in no rush to tighten monetary policy.
His comments followed less-than-stellar data on U.S. consumer spending that showed that even as confidence hit its highest level in more than 16 years last month, Americans are still holding their wallets tightly.
"We're not seeing great sentiment one way or another, but bursts of enthusiasm this morning definitely got squelched by the comments and economic data," said Boris Schlossberg, managing director of FX strategy at BK Asset Management.
"A lot of the air went out of the balloon today because we didn't get quite the positive data set that we wanted and we're still getting relatively cautious commentary from the Fed."
Consumer spending, which accounts for more than two-thirds of U.S. economic activity, edged up just 0.1 percent last month.