The U.S. dollar weakened in early European trade Friday, extending earlier losses as traders positioned for the end of the Federal Reserve's rate-hiking cycle, although moves have been limited ahead of the release of key nonfarm payrolls data later in the session.

At 03:20 ET (07:20 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% lower at 105.892, on course to drop 0.5% this week, just its third week of losses in the last 16 weeks.

GBP/USD traded largely unchanged at 1.2202, having risen 0.4% on Thursday, and was on course for a 0.7% weekly gain.

EUR/USD rose 0.1% to 1.0630, on course to record a weekly gain of 0.6%, with traders now debating how long the European Central Bank will keep interest rates high given the regional economic weakness.

Elsewhere, USD/JPY fell 0.1% to 150.36, in holiday-thinned trade, while USD/CNY edged lower to 7.3152, after a private survey showed earlier Friday that Chinese service sector activity grew less than expected in October, although it did accelerate slightly from the prior month.

AUD/USD rose 0.1% to 0.6439, on course for weekly gains of around 1.7%, amid increasing bets that the Reserve Bank of Australia will hike interest rates when it meets next week.

Source : Investing.com