By Anneken Tappe, MarketWatch

Currency markets attracted flows into perceived havens on Friday, as risk appetite weakened following softer-than-expected economic data from the eurozone and China.

The U.S. dollar was up against most of its rivals on Friday, with the exception of the Japanese yen , pointing to the move being driven by haven flows. The ICE U.S. Dollar Index , which measures the greenback against six rivals, rose 0.7% to 97.692, marking its highest level since June 2017, according to FactSet.

"It's difficult to imagine the dollar backing off significantly today without an improvement in risk appetite," wrote BMO's European head of FX strategy Stephen Gallo. "In this environment, softer U.S. data might actually prove to be a fillip for global risk assets, but investors are not entirely sure how market-friendly the [Federal Reserve] is going to be next week."

Commodity and global growth-linked currencies, like the antipodean currencies and the Norwegian krone were all weaker. The New Zealand dollar was the worst performer in the Group of 10 most heavily traded currencies, down 1.2% against the dollar at $.0.6782. The Australian dollar followed not far behind, down 1% at $0.7153.

The economic data that weighed on risk appetite Friday morning included the German and eurozone-wide purchasing managers indexes for December. The eurozone composite index slipped to 51.3 versus 52.8 expected, with a slowdown in both the manufacturing and the services component. The data looked similar for Germany. A reading of more than 50 indicates an expansion in activity.

Elsewhere, Chinese economic activity mostly slowed in November (http://www.marketwatch.com/story/china-economic-activity-mostly-slowed-in-november-2018-12-14), driven by weakness in both industrial production and retails sales. This also hit stock markets across Asia (http://www.marketwatch.com/story/asia-stocks-take-a-hit-from-economic-data-early-friday-following-2-days-of-gains-2018-12-13).

The euro slipped to a one-month low of $1.1272, compared with $1.1358 late Thursday in New York. The British pound fell to $1.2549, down from $1.2655.

Read:Here's how ECB's Mario Draghi walked the tightrope between caution and confidence (http://www.marketwatch.com/story/heres-how-ecbs-mario-draghi-walked-the-tightrope-between-caution-and-confidence-2018-12-13)

In Brexit news, the European Commission President Jean-Claude Juncker said the Irish backstop was not subject to renegotiation.

Also see: U.K. Parliament must wait till 2019 to vote on Brexit deal Theresa May struck with EU (http://www.marketwatch.com/story/uk-parliament-must-wait-till-2019-to-vote-on-brexit-deal-theresa-mat-struck-with-eu-2018-12-13)

"This is particularly embarrassing for [U.K. Prime Minister Theresa] May, because she convinced them to vote for her in the no-confidence vote by promising that she could get the EU to grant fresh concessions. The result makes it even more likely that the Withdrawal Agreement won't pass Parliament and therefore [the U.K.] will crash out of the EU without any agreement -- the disaster scenario for sterling," wrote Marshall Gittler, global strategist at ACLS Global.

May told reporters on the sidelines of the EU summit Friday that it was in everyone's interest to get a deal done as soon as possible (https://www.fnlondon.com/articles/uk-prime-minister-vows-to-get-better-brexit-deal-20181214), and that European leaders also wanted to get a deal across the line. Still the U.K. government had stepped up its no-deal preparations, May said.

(END) Dow Jones Newswires

December 14, 2018 09:53 ET (14:53 GMT)