The dollar slipped against major currencies on Friday as a rebound in European share prices eased some risk aversion fears, but trade was subdued ahead of U.S. payrolls data later in the day.
Investors tentatively sold off the dollar and low-yielding yen and bought into riskier assets, including higher-yielding currencies such as the euro and sterling.
The euro EUR rallied around one percent to a session high of $1.2850, according to Reuters data. It later trimmed some gains but held above a low of $1.2654 earlier in the day. The dollar JPY fell 0.4 percent to 97.38 yen.
"The sell-off in Asian equity markets was not so severe and S&P futures are up, leading to some dollar weakness," said David Powell, currency strategist at Bank of America in London. "But the repatriation bid is still very much alive."
Data from Europe on Friday reinforced the prospects for a prolonged global economic slowdown, which will likely keep investors wary of actively pursuing risks.
German industrial production fell by a larger-than-expected 3.6 percent in September, the largest monthly decline in nearly 14 years.
A bank lending survey from the European Central Bank showed banks will continue to tighten credit standards to firms and households in the fourth quarter. That would further slow growth and counteract the benefits of the central bank's 0.5 percentage point interest rate cut on Thursday.