The yen, another safe haven, rose as well.

U.S. President Donald Trump on Friday further heightened the uncertainty, saying he has not agreed to roll back tariffs.

His comments came a day after U.S. and Chinese officials reportedly agreed to roll back tariffs on each others' goods in a "phase one" trade deal if it is completed.

But a report also on Thursday seemed to contradict that news, with multiple sources familiar with the talks saying the rollback faces fierce internal opposition at the White House and from outside advisers. The idea of a tariff rollback was not part of the original October "handshake" deal between Chinese Vice Premier Liu He and Trump, these sources said.

"We had a lot of conflicting headlines and reports on the U.S.-China trade negotiations, specifically whether or not a phase one trade deal ... would include a reduction of existing tariffs," said Brian Daingerfield, head of G10 FX strategy, at Natwest Markets in Stamford, Connecticut.

"So that's what really has been driving the market: this underlying uncertainty over whether or not we will get that rollback," he added.

Overall, though, sentiment is likely to remain supportive for the dollar, equities, and other risky assets as efforts are being made to do a trade deal, which removes a huge risk to the global economic outlook.

"The fact that there is some discussion of moving existing tariffs leans more positive," Daingerfield said.

White House spokeswoman Stephanie Grisham told Fox Business Network in an interview on Friday that tariffs could be lifted on Chinese goods if an agreement is reached, but she gave no further details.

In midmorning trading, the dollar index rose 0.2% to 98.329 after earlier hitting a three-week high, led by gain against the euro, which dipped 0.2% to $1.1024.

The dollar, however, fell 0.1% against the safe-haven yen to 109.18 yen

The Canadian dollar, meanwhile, fell against the greenback after data showed the Canadian job market stagnated unexpectedly in October, losing 1,800 net positions, while the unemployment rate remained at 5.5%.

The U.S. dollar was last up 0.5% at C$1.3235 .

"The sharp drop in manufacturing employment confirms the Bank of Canada's fears that weak global demand is starting to weigh more heavily on the economy," said Stephen Brown, senior Canada economist, at Capital Economics.

Graphic: World FX rates in 2019 (http://fingfx.thomsonreuters.com/gfx/rngs/GLOBAL-CURRENCIES-PERFORMANCE/0100301V041/index.html)

(Reporting by Gertrude Chavez-Dreyfuss; editing by Jonathan Oatis)

By Gertrude Chavez-Dreyfuss