The greenback declined against major currencies as the U.S. housing slump and high oil prices slow growth in the world's biggest economy, however, volume on Friday was light, with both the United States and Britain heading into long holiday weekends.

U.S. dollar tumbled against the Japanese yen and Swiss franc from 104.26 to 103.05 and from 1.0335 to 1.0216 respectively as U.S. existing home sales declined by 1% to a 4.89 million annual rate in April. The stock of unsold U.S. houses touched a record high in April, indicating that the housing market rout was far from over.

The single currency retreated briefly to 1.5696 as a report showed a sharp fall in euro zone services activity in May and a slowdown across German's manufacturing sectors, however, euro rebounded to 1.5795 on speculation that boiling oil prices may even force the European Central Bank to raise interest rates this year together with the release of weak U.S. home sales data. The British pound rose from 1.9755 to 1.9852 on Friday due to dollar’s broad-based weakness.

Australian dollar and New Zealand dollar rose against U.S. currency from 0.9554 to 0.9638 and from 0.7823 to 0.7902 respectively on speculation rising commodity prices will allow the central banks to keep interest rates unchanged. China's yuan climbed to 6.9417 per dollar as money inflows from the trade surplus and increased fuel costs threaten to quicken inflation. French Finance Minister Christine Lagarde said policy makers should seek a stronger U.S. dollar and Chinese yuan against the euro.

U.S. and UK holidays on Monday also encouraged investors to scale back on risk heading into the long weekend, boosting the yen and low-yielding Swiss franc.

Next week will see the release of German Gfk index, GDP deflator and import price index, U.S. consumer confidence, new home sales and Midwest manufacturing on Tuesday; German retail sales, eurozone current account, U.S. durable goods on Wednesday; German unemployment rate, U.S. GDP, core PCE and jobless claims on Thursday; Japan manufacturing PMI, Tokyo CPI, unemployment rate and industrial production, eurozone business climate, economic sentment and unemployment rate, U.S. PCE index, Chicago PMI and University of Michigan survey on Friday.