U.S.
inflation data for April is due at 1230 GMT. Muted price pressures are
expected to give the Fed more breathing space regarding of the timing of
what will be its first rate hike since June 2006.
The U.S. economy's recovery has not been as robust as expected. U.S. data released overnight appeared to vindicate the Fed officials' cautious policy stance.
With weaker-than-expected existing home sales, manufacturing sector and U.S. Mid-Atlantic business activity, U.S. Treasury yields fell, helping nudge the dollar away from recent highs.
The euro rose 0.6 percent to $1.1175 EUR=, shrugging off data showing German business morale deteriorated slightly in May for the first time in seven months. It had hit a three-week low of $1.1062 earlier this week amid Greek debt concerns and was poised to lose almost 2.5 percent on the week, snapping a five-week winning streak.
The dollar also eased slightly to 120.975 yen JPY= after scaling a two-month peak of 121.49 midweek.
The benchmark 10-year German bond yield fell four basis points to 0.60 percent DE10YT=TWEB and the 10-year U.S. yield to 2.17 percent US10YT=RR.
Analysts at Barclays noted "tentative" signs that the euro zone bond market was stabilising after a rout that drove Bund yields to 0.80 percent from 0.05 percent. That high is unlikely to be retested any time soon.
"Were financial conditions to tighten further, the ECB could respond more forcefully," they said in a note on Friday.
Oil prices slipped on Friday as worries over the impact of war in the Middle East on crude supplies were outweighed by reports of profit-taking ahead of a long weekend.
Brent LCOc1 was down 45 cents at $66.09 a barrel after closing up 2.3 percent on Thursday.
The U.S. economy's recovery has not been as robust as expected. U.S. data released overnight appeared to vindicate the Fed officials' cautious policy stance.
With weaker-than-expected existing home sales, manufacturing sector and U.S. Mid-Atlantic business activity, U.S. Treasury yields fell, helping nudge the dollar away from recent highs.
The euro rose 0.6 percent to $1.1175 EUR=, shrugging off data showing German business morale deteriorated slightly in May for the first time in seven months. It had hit a three-week low of $1.1062 earlier this week amid Greek debt concerns and was poised to lose almost 2.5 percent on the week, snapping a five-week winning streak.
The dollar also eased slightly to 120.975 yen JPY= after scaling a two-month peak of 121.49 midweek.
The benchmark 10-year German bond yield fell four basis points to 0.60 percent DE10YT=TWEB and the 10-year U.S. yield to 2.17 percent US10YT=RR.
Analysts at Barclays noted "tentative" signs that the euro zone bond market was stabilising after a rout that drove Bund yields to 0.80 percent from 0.05 percent. That high is unlikely to be retested any time soon.
"Were financial conditions to tighten further, the ECB could respond more forcefully," they said in a note on Friday.
Oil prices slipped on Friday as worries over the impact of war in the Middle East on crude supplies were outweighed by reports of profit-taking ahead of a long weekend.
Brent LCOc1 was down 45 cents at $66.09 a barrel after closing up 2.3 percent on Thursday.
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