The dollar struggled to regain ground after taking a hit on Thursday from data showing a slowdown in manufacturing growth in the US Mid-Atlantic region and an unexpected fall in existing home sales in April.
Lingering concerns about the possibility of debt restructuring in Greece, however, could help limit the euro's gains against the dollar, market players said.
"This is probably a temporary rebound (in the euro). I personally think it wouldn't be a surprise if the euro were to head down towards below $1.40," said Daisuke Karakama, market economist at Mizuho Corporate Bank in Tokyo.
"It is not as if fresh measures have been offered for Greece or that anything has been officially decided. I think the euro could come under pressure next month because of this same problem," Karakama said.
The euro dipped 0.1 percent to $1.4299, staying above a seven-week low of $1.4048 marked on trading platform EBS earlier this week.
The euro has dropped around 4 percent since hitting a peak near $1.4940 in early May, as a rout in commodities such as silver and oil spooked investors, prompting the unwinding of dollar-funded bets in risky assets.
Worries that Greece may restructure its debt have also hurt risk appetite and weighed on the euro, which fell to a two-month low against the yen near 113.40 yen earlier this week.
The single currency has rebounded since then, and rose 0.1 percent against the yen from late US trade on Thursday to 116.89 yen .
The yen has been pressured this week by speculation about the potential for yen-selling flows related to Japanese corporate acquisitions of overseas firms, including drug maker Takeda Pharmaceutical's deal to buy Swiss-based Nycomed for 9.6 billion euros ($13.7 billion).
The yen dipped broadly, with the dollar rising 0.2 percent to 81.73 yen, edging back in the direction of a three-week high near 82.23 yen hit on Thursday.
There was some talk that the balance of flows at the 0100 GMT Tokyo fixing may be tilted toward yen-selling and dollar-buying.
The Bank of Japan is widely expected to keep monetary policy unchanged at its policy decision on Friday.
A focal point, however, will be whether the central bank provides hints about the potential for monetary easing in coming months, especially after Japan's economy shrank more than expected in the January-March quarter, said Mizuho Corporate Bank's Karakama.