The dollar dropped against the euro and yen on Friday as the market focused on the possibility of U.S. assets being sold after weaker-than-expected economic growth in the United States. The euro gained a fifth of a percent from late New York trading to $1.2917 by Thursday, recovering after four days of declines. The yen gained a fifth of a percent to 105.84 per dollar. However, trading was subdued as Japan was shut for a holiday. U.S. stocks fell sharply on Thursday, with the Dow, S&P 500 and Nasdaq indices all losing more than 1 percent. The stock market drop was triggered by data showing gross domestic product (GDP) grew in the first quarter at an annualized rate of 3.1 percent -- lower than the 3.6 percent analysts had expected -- as consumers and businesses were hurt by rising energy prices. The implicit GDP price deflator came in higher than forecast at 3.2 percent, although growth in core personal consumption spending was a subdued 1.6 percent from a year earlier. Craig Chan, a strategist at Royal Bank of Scotland, both said they were waiting for the March core PCE price index, due later on Friday, for a clearer outlook on inflation. The core PCE price index is favored by the Fed as a gauge of U.S. inflation. Chan expects the Fed to raise its benchmark interest rate by a quarter of a point at each of its meetings this year, a move that could push up U.S. yields and support the dollar. He said a possible slump in U.S. stocks because of the economic slowdown was a concern, but economies in Europe and Japan were not faring much better at the moment.