The dollar has pulled back slightly versus its major rivals on Friday. There has been very little economic data released today, so the focus has remained on Thursday's weaker than expected U.S. reports. Investors have also continued to watch the situations in Greece and Spain with great concern, after two of the major ratings agencies have chimed in.

Fitch downgraded Greece's long term credit rating on Thursday to CCC from B-, citing heightened risk that the nation may not be able to sustain its membership of Economic and Monetary Union.

Moody's downgraded 16 Spanish banks Friday, citing rising loan defaults, a renewed recession in Spain, restricted funding access and the reduced ability of the Spanish government to support lenders.

Moody's said, "The Spanish economy has fallen back into recession in first-quarter 2012, and Moody's does not expect conditions to improve during 2012. Moreover, the real-estate crisis that began in 2008 is ongoing, and unemployment has risen to very high levels."

The buck reached a 4-month high of $1.2641 versus the Euro early Friday morning, but has since eased back to around $1.2730.

Germany's producer price inflation slowed to the lowest level in twenty-two months in April, data released by the Federal Statistical Office showed Friday. The output price inflation eased to 2.4 percent in April from 3.3 percent in March, while economists expected inflation to slow to 2.5 percent.

The greenback has remained basically flat in comparison to the pound sterling Friday. The U.S. currency climbed to a 2-month high of $1.5730 early this morning, but has since retreated back to around $1.58.

British households continued to remain downbeat about their property prices in May, but at a lesser degree compared to the previous month, data from a survey by Knight Frank and Markit Economics showed Friday. The house price sentiment index rose to 46.3 in May from 45.4 in April, indicating that households were less pessimistic about their home prices.

The dollar added slightly to yesterday's sharp losses versus the Japanese Yen, reaching a 3-month low of Y79.026. On Wednesday, the dollar had been trading around Y80.500.

Japanese Finance Minister Jun Azumi said Friday that authorities are cautiously monitoring the movement of yen. At a regular press conference, he said excessive reaction of speculators led to a rapid yen appreciation on Thursday. The government is prepared to take timely and appropriate action, Azumi said.

Japan's government on Friday raised its economic assessment for the first time in nine months. "The Japanese economy is on the way to recovery at a moderate pace, reflecting emerging demand for reconstruction, while difficulties continue to prevail," the Cabinet Office said in its monthly report.