The dollar continued its slide Friday, hitting new one-year lows versus European currencies and eight-month low versus the yen, after much narrower-than-expected U.S. trade deficit data failed to reverse the broadly bearish sentiment in the market. The greenback staged a brief rally after a report showed the nation's trade deficit narrowed to $62.0 billion in March, the lowest since last August. Economists surveyed by MarketWatch had expected the deficit to widen to $66.9 billion. "The U.S. trade deficit for March was smaller than expected and while there are positive GDP implications, the implications for the dollar are minor," said Marc Chandler, currency strategist at Brown Brothers Harriman. Dollar rally is "brief and shallow. The short-term market is keen to sell into dollar upticks. Sentiment remains extremely poor." In early New York trading, the euro rose as high as $1.2957, and was last at $1.2886, up from $1.2855 late Thursday. The dollar also fell against the yen, moving to 109.82 yen from 110.19 yen. The British pound rose to $1.8982 from $1.8833. The dollar was at 1.2029 Swiss francs from 1.2127 francs. On the week, the U.S. currency gave up nearly 3% against the yen and 1.6% against the euro. "The dollar has rallied a bit, but it needs a strong TIC number [on foreign capital inflows] next week for a more meaningful boost," said Kathy Lien, chief strategist at FXCM.