The Dollar remained pinned close to 16-week lows on Friday against a basket of major rivals before U.S. labour market data is released.

The Dollar index – measuring the greenback against six peers – declined 0.1% to 104.55, having earlier hit its lowest level since 29th June at 104.36.

Last month, the index declined more than 5% on forecasts the Federal Reserve would begin to slow down its rate hiking pace beginning at this month's meeting.

This view was bolstered by data published on Thursday, with the core personal consumption expenditures (PCE) price index falling short of expectations, Reuters reports. The Federal Reserve tracks this index for the 2% inflation target.

Fed chair Jerome Powell said this week that the time has come to slow down the pace of rate increases, stating that "slowing down at this point is a good way to balance the risks."

"Over the past few days, there was sufficient cause for pricing out Dollar strength because not just Powell's overall dovish speech, but also yesterday's U.S. data hit the same deflation spot," said Commerzbank analysts.

Investor focus is now on non-farm payroll data being published on Friday for indications of how rate hikes have impacted the labour market.

"Markets are really buying into the pivot story from the Fed," said ING FX strategist Francesco Pesole.

"Considering what's come from the inflation side, we'll need to see strong payroll numbers for the Dollar to rebound," he added.

Elsewhere, the Chinese Yuan edged up 0.4% against the Dollar to 7.0294. The Yuan was on course for its largest weekly gain since 2005, as per Refinitiv data, supported by hopes of a shift away from the country's zero-Covid policy and slower rate hikes by the Fed.

Against the Japanese Yen, the Dollar was down 1% at 133.98 Yen, a low not seen since 16th August.

In addition, there was little change for the Euro on Friday at $1.0527, following on from the 1.1% gain on Thursday. At the time of writing, the Pound was trading at $1.2260, a 0.1% decline. On Thursday, the Sterling reached a five-month high of $1.2311, up 1.7%.