The U.S. dollar declined against its major counterparts in the European session on Friday, as rebounding oil prices reduced the demand for safe-haven assets, while receding hopes for Fed rate hikes in future also weighed.

Crude oil futures rebounded despite concerns about excess supply in the market and fears about possible drop in energy demand due to global economic slowdown.

Fears over U.S. government shutdown continued as Democrats and Republicans showed no signs of compromise on Thursday to end the standoff over funding Mexican border wall.

Overnight data showing weaker than expected U.S. consumer confidence index in December also undermined the currency.

Data from the Conference Board showed that consumer confidence index slumped to 128.1 in December after dipping to a revised 136.4 in November.

Economists had expected the consumer confidence index to edge down to 134.0.

In economic releases, the U.S. pending home sales data is due at 10:00 am ET.

The currency has been trading in a negative territory against its major counterparts in the Asian session.

The greenback dropped to 0.9806 against the franc, a level not seen since October 1. The greenback is seen finding support around the 0.97 level.

The greenback weakened to more than a 4-month low of 110.24 against the yen, following an advance to 111.02 at 5:00 pm ET. The greenback is poised to find support around the 108.00 area.

Data from the Ministry of Economy and Industry showed that Japan retail sales fell a seasonally adjusted 1.0 percent on month in November.

That missed expectations for a decline of 0.4 percent following the 1.3 percent increase in October.

The greenback slipped to a weekly low of 1.1473 against the euro, from a high of 1.1426 hit at 5:00 pm ET. On the downside, 1.16 is likely seen as the next support for the greenback.

Having advanced to 1.2635 against the pound at 4:00 am ET, the greenback reversed direction and dropped to a 2-day low of 1.2693. The greenback is likely to find support around the 1.28 level.

The greenback pared gains to 1.3595 against the loonie, 0.7068 against the aussie and 0.6718 against the kiwi, from its early highs of 1.3626, 0.7026 and 0.6694, respectively. The next possible support for the greenback is seen around 1.33 against the loonie, 0.73 against the aussie and 0.685 against the kiwi.

Looking ahead, at 8:00 am ET, German preliminary CPI for December is set for release.

In the New York session, U.S. advance goods trade balance, pending home sales and wholesale inventories for November will be out.

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