The Dollar slid against most major currencies on Friday, and posted its worst weekly performance against the Euro in 2008 to date, after US economic reports renewed fears that the economy continues to drop into recession. Investors pushed the Dollar down against the Euro for the fifth day in the last six, pushing the euro zone currency above 1.4700 for the first time since Feb. 5th, after a gauge of US consumer sentiment plunged to a 16-year low in February.

EurUsd last traded at 1.4682, up 0.27%, after climbing as high as 1.4709.

UsdJpy was unchanged to 107.82 after the New York Federal Reserve said its New York state February manufacturing index posted the biggest monthly decline on record. Indeed, Friday's batch of weak data comes a day after Fed Chairman Ben Bernanke warned of continued sluggish growth in the near term and said the central bank will act as needed to provide insurance against downside risks. As a result the Euro may be set for a run at its record high just shy of 1.5000, said analyst, particularly with the Federal Reserve seen cutting interest rates further below the European Central Bank's benchmark interest rate.

Since mid September, the Fed has cut its benchmark rate by 225bp to 3%. Bernanke's remarks and recent economic data have left investors betting on another 50bp cut at the central bank's March meeting. But expectations for the ECB to follow with rate cuts of its own have faded, with ECB officials stressing that inflation is a bigger concern than growth.

That has continued to move rate spreads in favor of the Euro, reducing the appeal of holding US over euro-zone debt.

UsdChf felt 0.36% to 1.0933. GbpUsd was the only major cross to weaken, falling 0.41% to 1.9613 with dealers citing technical factors for the pullback.

Some analysts worried that inflation may not be only a European phenomenon. University of Michigan consumer sentiment index showed one-year inflation expectations soared to their highest since August 2006. Separate data on Friday showed US import prices rose by more than economists had expected in January, mainly the result of high food and energy costs.