The dollar index against a basket of six rivals was basically unchanged at 97.001, and on track for a near 0.5pc gain this week. The index had touched an 11-week low of 96.459 last Friday.
The Federal Open Market Committee's (FOMC) two-day policy meeting is set to begin on Tuesday. With trade tensions rising, US growth slowing and hiring in May declining, markets have priced in at least two rate cuts by the end of 2019.
There was only an 11.3pc expectation on Thursday that US interest rates will be at current levels in July of this year, compared to 74.1pc a month ago, according to the CME Group's FedWatch tool.
"Ahead of the FOMC meeting, people are expecting dovish comments from the Fed, which is weighing on the dollar in general," said Masafumi Yamamoto, chief currency strategist at Mizuho Securities.
"However, other currencies like euro and sterling are weak and their weakness is helping the strength of the dollar," he said.
Investors' attention on Friday will also be on US retail sales data due later in the day for insights into the state of domestic demand in the world's biggest economy.
Against the yen, the dollar dipped 0.05pc to 108.34 yen. The yen showed little reaction to the latest round of trade negotiations between Tokyo and Washington on Thursday.
Japan and the United States deepened their understanding over each other's position on trade and will continue discussions, Japan's economy minister Toshimitsu Motegi said after meeting with US Trade Representative Robert Lighthizer.
Motegi said the two would probably meet again ahead of the G20 summit meeting in Osaka, Japan late this month.
The euro edged up 0.03pc to $1.1280, holding up after falling during the past two sessions, though it was still set for a weekly loss of 0.44pc.
Elsewhere, the Australian dollar was a shade lower at $0.6913, staying within reach of this month's low of $0.6901 touched on Thursday.
Oil futures dipped in early trading on Friday, having risen sharply on Thursday following attacks on two tankers near Iran and the Strait of Hormuz, a key passage for seaborne oil cargoes.
Mizuho's Yamamoto said rising oil prices resulting from geopolitical tension in the Middle East could create a drag on the dollar, adding that higher crude prices were not necessarily bad for the global economy.