The Dollar Index fell, extending a third straight weekly decline, on speculation the Federal Reserve will reassure investors that policy will remain accommodative at next week’s meeting. The Federal Open Market Committee is scheduled to meet July 30-31 and won’t announce a decision to reduce its monthly bond purchases at that meeting, according to 54 economists surveyed by Bloomberg News from July 18-22. Half of those polled said Fed Chairman Ben S. Bernanke will trim bond buying to $65 billion from the current pace of $85 billion in September. A Wall Street Journal article yesterday said the Fed is likely to revise its guidance on rates when policy makers meet July 30-31.

The U.S. currency has dropped versus 15 of its 16 major counterparts since July 19 before reports next week predicted to show economic expansion in the second quarter and jobs growth in July slowed. A July 31 report will probably show U.S. annualized gross domestic product grew 1 percent in the April-to-June period, slowing from 1.8 percent in the previous three months, according to the median forecast in a Bloomberg poll. Employers added 184,000 jobs this month, after 195,000 additional positions were created in June, a separate poll forecast before the Aug. 2 data release.

The yen erased gains today after Japan’s statistics bureau said consumer prices excluding fresh food rose 0.4 percent from a year earlier in June. The median of estimates in a Bloomberg survey was for a 0.3 percent increase.

EUR / USD: during the Asian session the pair traded in the range of $ 1.3265-90

GBP / USD: during the Asian session the pair traded in the range of $ 1.5370-05

USD / JPY: during the Asian session the pair fell to Y98.65

There is a very quiet calendar on both sides of the Atlantic Friday, with little to suggest any equivalent event to the corresponding day last year, when ECB President Mario Draghi promised to do "whatever it takes" to preserve the euro. The European calendar gets underway at 0600GMT, with the release of the German June import and export prices. French July consumer confidence data will be released at 0645GMT. Analysts are looking for a reading of 79, up from 78. At 1000GMT, the Central Bank of Ireland bulletin for the third quarter is set for release.

Across the Atlantic, Mexico's June trade balance is expected at 1300GMT, with the Bank of Mexico's latest policy meeting minutes expected at 1400GMT. In between, at 1355GMT, the final University of Michigan July Consumer Sentiment data is set to be released. The Michigan Sentiment index is expected to be revised up very slightly to a reading of 84.0 in July from the 83.9 preliminary reading. There were upward revisions to Michigan from the preliminary to final estimates in each of the last six months, with particularly large adjustments in March and April. There were accompanying upward revisions to both the current conditions and expectations readings in each of the last six months as well. The 1-year inflation expectation reading was 3.3% in the preliminary July estimate, up from 3.0% in June.