The dollar index, which measures the currency against a basket of six rivals, was 0.2 percent higher, recovering after a week that included several weak data reports, including dismal US retail sales. Major currencies remained range-bound as the market awaited developments in trade talks between Washington and Beijing.
The Labour Department said on Friday that import prices decreased 0.5 percent last month as petroleum product costs fell and a strong dollar curbed prices for motor vehicles and consumer goods, leading to the largest annual drop in nearly 2-1/2 years.
After rising 1.6 percent so far in February, the dollar fell broadly on Thursday when poor US retail sales suggested a sharp slowdown in economic activity at the end of 2018. "Calling the next move in the dollar is pretty tough right now. The start of the year saw investors move into undervalued risk assets, but right now the mood is shifting toward one of secular stagnation," said Chris Turner, head of foreign exchange strategy at ING.
The results of a meeting on Friday between US Treasury Secretary Steve Mnuchin and Chinese President Xi Jinping is also in focus for foreign exchange investors. The euro extended its fall to a three-month low after Benoit Coeure, a member of the European Central Bank's executive board, said a new round of cheap multiyear loans to banks was possible. Coeure added that the euro zone's recent economic slowdown is more pronounced than earlier expected, suggesting the path of inflation will also be more shallow.
The single currency was headed for a second week of losses and was down 1.7 percent year to date on weaker-than-expected euro zone data. Elsewhere, sterling was broadly flat at $1.28 after British Prime Minister Theresa May on Thursday suffered a largely symbolic defeat on her Brexit strategy.