The dollar held a soft tone versus its peers on Friday, on rising expectations the U.S. Federal Reserve may hit the pause button on monetary tightening if the economy slows this year.
Fed Chairman Jerome Powell reiterated on Thursday the U.S. central bank has the ability to be patient on monetary policy given that inflation remains stable. Markets are now pricing in no further rate hikes by the Fed this year.
Sentiment was cautious in early Asian trade on a lack of concrete details from the United States and China on any progress made in their trade dispute after a three-day meeting in Beijing. The two sides are more than halfway through a 90-day truce agreed by U.S. President Donald Trump and his Chinese counterpart Xi Jinping.
The dollar index was marginally lower at 95.5 on Friday. The index has fallen around 2.2 percent since mid-December on expectations that a slowdown in growth, both in the United States as well as globally, will restrict the Fed from raising rates in 2019.
The safe-haven yen strengthened 0.1 percent to 108.32 per dollar, reflecting investors' cautious wait-and-see mode.
The euro gained 0.1 percent at $1.1502, after losing 0.4 percent of its value in the previous session.
Elsewhere, sterling traded marginally firmer, fetching $1.2752 in early Asian trade with traders focused on the progress of Brexit.