LONDON (AFP) - The dollar remained on a backfoot against the euro and yen following news of a near record US trade deficit in August and fresh all-time high oil prices.
The single European currency rose Friday to 1.2393 dollars in early European trading from 1.2382 overnight in New York.
The dollar traded at 109.58 yen against 109.63.
The US currency extended losses seen a day earlier on news that the US trade deficit swelled to 54 billion dollars in August, the second biggest on record, reflecting the impact of high-priced oil and a flood of Chinese imports.
The "widening beyond expectation of the US trade deficit and the modest increase in the weekly jobless claims sit alongside the continued ascent of the oil price to add yet more colour to the picture of the US economy," Commerzbank analysts wrote in a note to clients.
That picture, "while well short of concerning, is developing clear risk of remaining softer for longer," they added.
With more data looming before the weekend, "it will take something considerably better than expectations if the rally in the bond market and the pressure on the dollar is to be arrested," they predicted.
The scale of the deterioration of the US trade balance surprised analysts, who had expected a deficit of about 51.5 billion dollars.
Meanwhile New York's main oil contract soared to an all-time intra-day high of 54.88 dollars a barrel Thursday.
But market watchers noted that while the dollar was under pressure, it remained within a well-established trading range.
"The dollar should be reeling from a series of body blows, but stubbornly remains within the relative safety of its established range," said HBOS currency analyst Steve Pearson.
Markets were hoping for direction from Friday's US retail sales report for September.
CALYON analyst Daragh Maher said even if the dollar saw a boost from an expected rise in retail sales, "it will quickly have to contend with a likely drop in Empire manufacturing and University of Michigan consumer confidence released later in the day," referring to two surveys due for release.
The euro was changing hands at 1.2393 dollars from 1.2382 late on Thursday in New York, 135.78 yen (135.73), 0.6890 pounds (0.6890) and 1.5420 Swiss francs (1.5411).
The dollar stood at 109.58 yen (109.63) and 1.2442 Swiss francs (1.2447).
The pound was at 1.7986 dollars (1.7969), 197.11 yen (197.05) and 2.2379 Swiss francs (2.2367).
On the London Bullion Market, the price of an ounce of gold stood at 417.40 dollars against 415.35 on Thursday afternoon.