The dollar fell to eight-week lows against the euro and a three-week trough versus the yen on Friday, extending the previous day's tumble on weaker than expected U.S. economic data and fresh Japanese stock gains. Gains of more than one percent in Tokyo's Nikkei stock average <.N225> provided fresh impetus to sell the dollar after disappointing figures for U.S. jobs and economic growth on Thursday hit the greenback by tempering rate hike expectations. Dealers said dollar-selling sentiment was compounded by repositioning ahead of a three-day weekend in the U.S., with traders reluctant to hold long positions due to rising concerns about a terror attack on U.S. soil.
At 0655 GMT, the dollar traded near the day's low of $1.2296 , its weakest since early April. It also remained near the day's low of 110.44 yen , its weakest since May 7. The Swedish central bank's latest interest rate decision is due at 0730 GMT, the euro zone flash inflation estimate is at 0900 GMT, and is euro zone M3 money supply data is at 0800 GMT. The University of Michigan U.S. consumer sentiment survey for May is due at 1345 GMT, expected to remain steady versus April at 94.2. At 1400 GMT the National Association of Purchasing Management-Chicago index of manufacturing activity is expected to show a slip to 61.0 from 63.9 in April. Some market players said the dollar also came under pressure from U.S. investment banks' buying of yen ahead of a revision of the Morgan Stanley Capital Investment global equity index that will take effect at the end of Friday.|||