The U.S. dollar edged lower in early European trade Friday as traders awaited the release of the key U.S. payrolls data later in the session for more clues of the health of the country's economy.

At 03:05 ET (07:05 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% lower at 102.278, having climbed as high as 102.84 in the prior session, its highest since July 7.

GBP/USD traded largely flat at 1.2712, the day after the Bank of England lifted its benchmark interest rate by 25 basis points to a 15-year high of 5.25%.

Although this was the BOE's 14th consecutive interest rate increase to combat inflation, it was a smaller rise than the prior month's 50 basis points and has raised speculation that the central bank is considering ending its tightening cycle.

EUR/USD rose 0.1% to 1.0951, helped by German industrial orders rising significantly more than expected in June, climbing by 7.0% on the month due to large-scale orders in several sectors.

On the flip side, French industrial production fell 0.9% in June, a weaker result than the fall of 0.3% expected and considerably below the previous month's 1.1% growth.

Elsewhere, USD/JPY traded flat at 142.56, while USD/CNY rose 0.2% to 7.1814 after Chinese officials once again offered no concrete details on the planned stimulus measures, souring investor optimism over a potential economic recovery in the country.

Source : Investing