The dollar remained weak against a basket of currencies on Friday, bruised by comments by senior U.S. officials this week backing a weak dollar and after data showed U.S. economic growth unexpectedly slowed in the fourth quarter.
The dollar index, which measures the greenback against a basket of six major currencies, was down 0.38 percent at 89.05 and on track for a weekly fall of 1.7 percent, its worst performance since May.
President Donald Trump's comments on Thursday that he wanted a "strong dollar," a day after Treasury Secretary Steven Mnuchin said a weaker greenback would help U.S. trade balances in the short term, failed to put a lid on volatility and keep dollar bears in check.
The euro was up 0.24 percent against the greenback at $1.2425 after hitting a more than three-year high of $1.2536 on Thursday.
"$1.25 in euro-dollar is a critical level and its got a lot of sticker shock associated with it," said Greg Anderson, global head of FX strategy at BMO Capital Markets.
"There were probably a lot of options barriers and lots of stops up there that people would love to take out. You would expect to see an acceleration in volatility," he said.
"We did have those comments, and it added to the drama," Anderson said.
The market was likely to take a breather now but the underlying trend for a gradually weakening dollar remained intact, Anderson said.