The euro saw sharp weakness against the dollar and yen as weak economic data fueled expectations the European Central Bank may need to step in again to further help the economy.

The euro fell to a 10-day low of 1.3264 against the dollar, continuing its recent downtrend. Last week, the single currency hit a 2 1/2-month high of 1.3738.

The U.S. Commerce Department reported personal spending rose 0.2 percent in February following an upwardly revised 1.0 percent increase in January. The modest increase in spending came in line with the expectations of economists.

At the same time, data showed personal income edged down 0.2 in February after a downwardly revised 0.2 percent increase in the previous month. Economists had been expecting a slightly more modest 0.1 percent decrease.

The euro fell to an eight-day low of 129.37 versus the Japanese yen. Earlier this week, the euro hit a five-month high of 134.50.

The Japanese government reported that its core consumer price index was unchanged in February from a year earlier, while the overall CPI was down 0.1% on-year.

The euro turned lower amid choppy trading with the pound, which saw weakness against most of the other majors. The European currency fell to a two-day low of 0.9250 after earlier hitting a four-day high of 94.13.

In the UK, the Office for National Statistics said the British economy shrank 1.6% sequentially in the fourth quarter, revised down from a contraction of 1.5%. In the third quarter, GDP was down 0.7%. Two consecutive quarters of decline in GDP denotes a recession. Thus, in the fourth quarter, the economy entered its first recession since 1991 and recorded the largest sequential fall since 1980.

On the economic front Friday, the German federal Statistical Office said in a preliminary report that the consumer price index or CPI rose 0.5% year-over-year in March, slower than the 1% increase in the previous month. Economists were looking for an increase of 0.7%.

Meanwhile, data released by the Eurostat showed that industrial new orders in the Eurozone plunged 34.1% on an annual basis in January, sharper than the 23.8% drop recorded in December. New orders fell for the sixth consecutive month, and the January drop marks the steepest on record. Industrial orders also declined more than economists' expectations of a 28.4% drop.

Germany's Federal Statistical Office announced that the import price index dropped 5.4% year-over-year in January, after falling a revised 4.1% in December. This was the steepest decline since February 1999. Economists were looking a decline of 6% for January.

The statistical agency also announced that the number of employees in manufacturing rose 0.3% annually in January to 5.2 million persons. However, the number of hours worked and gross earnings declined.

The French statistical office INSEE reported that the gross domestic product or GDP fell 1.1% quarter-on-quarter in the final three months of the previous year, less than a 1.2% decline estimated previously. In the third quarter, the economy expanded only 0.1%.

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