The U.S. dollar lost ground against its major opponents in the European session on Friday, as the news that the U.S. special counsel Robert Mueller is expanding Russia probe to include Trump's business transactions stoked worries about economic agenda.

Media reports suggested that Muller is examining a broad range of transactions involving Trump's businesses as well as those of his associates.

Investigators are looking at Russian purchases of apartments in Trump buildings, Trump's involvement in a controversial SoHo development with Russian associates, the 2013 Miss Universe pageant in Moscow and Trump's sale of a Florida mansion to a Russian oligarch in 2008, according to the reports.

The news comes a day after Trump suggested in an interview with the New York Times that Mueller would be crossing a "red line" by looking into his and his family's finances.

Hawkish talk from the European Central Bank Chief Mario Draghi suggesting a possible policy tweak also pressured the currency.

The greenback showed mixed performance in the Asian session. While the currency fell against the euro and the pound, it held steady against the yen and the Swiss franc.

Reversing from an early high of 1.2954 against the pound, the greenback dropped to 1.3020. The next possible support for the greenback is seen around the 1.32 region.

Data from the Office for National Statistics showed that the UK budget deficit increased in June.

Public sector net borrowing, excluding interventions increased by GBP 2.0 billion from previous year to GBP 6.9 billion in June. The expected level was GBP 4.9 billion.

The greenback slipped to a 14-1/2-month low of 0.9481 versus the franc and more than a 3-week low of 111.27 against the yen, off its early highs of 0.9523 and 112.08, respectively. The greenback is poised to locate support around 0.93 against the franc and 110.00 against the yen.

Extending early slide, the greenback weakened to near a 1-year low of 0.7450 versus the kiwi. This may be compared to a high of 0.7394 hit at 5:00 pm ET. The greenback is seen finding support around the 0.76 level.

Figures from Statistics New Zealand showed that New Zealand's net migration increased in June from a year ago.

In the year to June 30, net migration reached a new record high of 72,305, up from 69,090 in the same period of 2016.

The greenback reversed from its early 3-day high of 0.7875 versus the aussie, easing to 0.7934. If the greenback extends decline, 0.80 is likely seen as its next support level.

The Reserve Bank of Australia's Deputy Governor Guy Debelle said that Australia's interest rate need not increase automatically with the tightening of other central banks.

"Just as the policy rate in Australia did not need to decline to the very low levels seen in other parts of the world, the fact that other central banks increase their policy rates does not automatically mean that the policy rate here needs to increase," Debelle said in Adelaide.

The greenback slipped to 1.2546 against the loonie, from a high of 1.2609 hit at 8:15 am ET. Next likely downside target for the greenback-loonie pair is seen around the 1.24 mark.

On the flip side, the greenback held steady at 1.1642 against the euro, after staging a rebound from near an early 2-year low of 1.1677. The pair finished Thursday's trading at 1.1630.

The Survey of Professional Forecasters published by the European Central Bank showed that the Eurozone economy is forecast to expand at faster than expected pace.

SPF respondents lifted 2017 growth outlook to 1.9 percent from 1.7 percent and that for next year to 1.8 percent from 1.6 percent. Expectations for 2019 was raised marginally to 1.6 percent from 1.5 percent.

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