The U.S. dollar dropped against its major counterparts in the European session on Friday, halting recent rally, ahead of Federal Reserve Chair Jerome Powell's speech later in the day.

Investors focus on a panel discussion involving Powell at a conference in Washington, D.C., for more clues on the policy outlook.

Solid economic data and optimism about a debt ceiling deal pushed the currency higher on Thursday.

U.S. Vice President Kamala Harris and Biden's top economic adviser, Lael Brainard, said a debt default could trigger a recession.

The dollar index that tracks the greenback against a basket of other currencies edged down to 103.21.

The greenback dropped to 1.2438 against the pound and 0.9019 against the franc, off its early highs of 1.2392 and 0.9058, respectively. The greenback is seen finding support around 1.27 against the pound and 0.88 against the franc.

The greenback fell to 0.6663 against the aussie and 1.3469 against the loonie, from its early highs of 0.6614 and 1.3512, respectively. The greenback may locate support around 0.69 against the aussie and 1.32 against the loonie.

The greenback declined to 137.96 against the yen and 1.0804 against the euro, reversing from an early high of 138.72 and near a 2-month high of 1.0759, respectively. The next possible support for the greenback is seen around 134.00 against the yen and 1.10 against the euro.

The greenback touched 0.6288 against the kiwi, its weakest level since May 12. If the currency slides again, it may find support around the 1.32 area.

Looking ahead, Canada retail sales data for March and U.S. Baker Hughes oil rig count data are due to be released in the New York session.

At 8:45 am ET, Federal Reserve Bank of New York President John Wiliams will deliver a speech before the Thomas Laubach Research Conference organized by the Federal Reserve Board of Governors, in Washington D.C.

At 9:00 am ET, Federal Reserve Board Governor Michelle Bowman will participate in a discussion before the Texas Bankers Association 138th Annual Convention, in San Antonio, Texas.

At 10:55 am ET, ECB board member Isabel Schnabel will deliver a speech at the Conference on Financial Stability and Monetary Policy in the honour of Charles Goodhart, followed by the opening of the Charles Goodhart Library, in London.

Five minutes later, Federal Reserve Chair Jerome Powell will participate in "Perspectives on Monetary Policy" panel before the Thomas Laubach Research Conference hosted by the Federal Reserve, in Washington D.C.

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