In early Asian deals on Friday, the U.S. dollar outperformed against other major currencies as traders purchased the currency in response to the Federal Reserve's minutes of latest meeting, which indicated that the policymakers were concerned about continuing to extend the bond purchase purchase program.

The minutes showed that several members said it would probably be appropriate to slow or stop the central bank's asset purchases well before the end of 2013. The members cited concerns about financial stability or the size of the balance sheet.

At the December meeting, the Fed kept rates near zero and decided to expand their quantitative easing program by adding $45 billion of monthly Treasury purchases. Two months before, the Fed began buying $40 billion per month in mortgage-related debt.

The greenback strengthened to near 2-1/2-year high of 87.78 against the yen, adding 0.61 percent from Thursday's close of 87.25. The next upside target level for the greenback-yen pair is seen at 90.00.

Japan's service sector activity expanded at a slightly faster pace in December, a survey by Markit Economics revealed. At the same time, confidence among service providers hit its highest level in five years.

The headline Business Activity Index recorded a level of 51.5 in December, up slightly from 51.4 in the previous month.

Against the franc, the greenback hit more than a 3-week high of 0.9289 with 0.932 seen as the next resistance level. The pair closed Thursday's trading at 0.9270.

The greenback is trading at a 2-day high of 0.9895 against the loonie, up 0.15 percent from Thursday's closing value of 0.9880. The next upside target level for the greenback-loonie pair is seen at 0.995.

The greenback that closed Thursday's deals at 1.3050 against the euro advanced to 1.3021, its highest level since December 12. If the greenback extends gain, it may break 1.295 level.

Against the aussie and the kiwi, the U.S. currency is trading at a 2-day high of 1.0435 and a 4-day high of 0.8231 and the next likely upside target levels for the greenback are seen at 1.04 and 0.82, respectively. At yesterday's close, the greenback was worth 1.0469 against the aussie and 0.8283 against the kiwi.

The greenback that spiked up to more than a 3-week high of 1.6057 against the pound stabilised thereafter. On the upside, the greenback may seek 1.60 as next target level. The pair closed yesterday's deals at 1.6110.

Looking ahead, German retail sales for November, PMIs from major European economies for December, U.K. mortgage approvals for November and Eurozone CPI for December are due in the European session.

Canada jobs data for December, industrial product price index for November, U.S. jobs data for December, factory orders for November and ISM non-manufacturing composite index for December are likely to influence trading in the New York session.

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