Upbeat euro zone data underpins euro
Dollar headed for first weekly gain in nearly two months
Focus on Fed meeting in May; rate hike priced in

SINGAPORE, April 21 Reuters The U.S. dollar slipped against most major currencies on Friday, as investors digested mounting evidence that growth in the world39;s largest economy is slowing and priced in a likely pause in tightening by the Federal Reserve at the June meeting after a widelyexpected interest rate hike next month.

In the case of the euro, a surprising recovery in the euro zone economy in April underpinned the currency.

The greenback, however, was headed for its first weekly gain in nearly two months on rate increase expectations for May.

Expected growth differentials have narrowed slightly against the dollar in the last few hours, with betterthanexpected purchasing manager indices pointing to more resilient economic activity in the UK and euro area, said Karl Schamotta, chief market strategist, at Corpay in Toronto.

We39;re also seeing a continued decline in implied volatility across most asset classes as investors position for an imminent end to the global monetary tightening cycle and that is weakening demand for traditional safe havens, he added.

The dollar index, which measures the performance of the U.S. currency against six others, slipped 0.1 on the day to 101.70 and headed for a weekly gain of about 0.2, its first since late February.

Elsewhere, the recovery in the euro zone unexpectedly gathered…