The euro hovered at a two-week low with support at $1.13. The single currency still posted its steepest weekly drop against the dollar in over four months in the wake of data that showed an economic slowdown in Europe was spreading.
"The rally that propelled the dollar broadly higher last year has enjoyed renewed life with U.S. growth remaining solid while peers abroad lose momentum," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.
An index that tracks the greenback versus the euro, yen, sterling and three other currencies was up 0.13 percent at 96.634.
On the week, the ICE dollar index was up 1.1 percent, its biggest weekly increase since a 1.28 percent jump in the week of Aug. 10, 2018.
The euro was down 0.13 percent at $1.13230 for a weekly decline of 1.1 percent, which was its biggest weekly fall since late September.
The European Commission cut its growth and inflation forecasts on Thursday as downside surprises to German and Spanish industrial orders fuelled worries about an accelerating slowdown.
Those figure have weighed on local bond markets. Core European government debt yields touched their lowest in over two years. Benchmark German yields were just 10 basis points away from zero percent.
U.S. yields also fell on the week, holding above the lows of their recent trading range.
With Chinese markets closed for Lunar New Year this week, market volatility declined.
For example, implied volatility in the euro, or expected swings in the single currency in a month, fell earlier this week to its lowest level since Dec. 2017 before rebounding, according to Refinitiv data.
Anxieties about the global economy were compounded by comments from U.S. President Donald Trump indicating he did not plan to meet with Chinese President Xi Jinping before a March 1 deadline to achieve a trade deal.
That helped the perceived safe-haven currencies such as the Japanese yen and the Swiss Franc hold up against the dollar. The dollar was last at 109.785 yen, while the greenback was down 0.23 percent at 1.00015 Swiss franc.
Sterling was marginally lower at $1.2938 for its biggest weekly drop since October. Traders expect the pound to remain volatile because of the uncertainty surrounding Brexit.
(For a graphic on world forex rates in 2019, click here http://tmsnrt.rs/2egbfVh)
(Reporting by Richard Leong in NEW YORK; Additional reporting by Saikat Chatterjee in LONDON; Vatsal Srivastava in SINGAPORE; Editing by Dan Grebler and Grant McCool)
By Richard Leong