Early Friday morning trading in Europe saw the U.S. dollar rise, reaching the highest level in 2 months as investors prepared for hawkish remarks from Fed Chair Jerome Powell at Jackson Hole.

The dollar index that gauges the greenback versus its major pairs edged up by 0.2% at 104.107, slightly below the 104.25 mark, which was the highest on Friday since June 7.

This week, the index gained about 1%, putting it on pace to advance for a sixth consecutive week.

The number of Americans submitting new claims for unemployment benefits decreased last week, according to data, adding to a string of economic reports that have all but allayed fears of an oncoming U.S. recession. As a result, the dollar advanced on Thursday.

EUR/USD slumped 0.2% to 1.0784 following the second quarter of the German economy's stagnation compared to the first three months, when data showed no growth for the three months ending in July and a 0.2% annual decline.

GBP/USD dropped by 0.2% to 1.2574, despite the GfK consumer confidence barometer rising to -25 in August from a three-month low of -30 in July, its highest increase since April, data showed earlier Friday, the stronger dollar continued to be a drag on the economy. Lower inflation also made Britons less pessimistic about the future of their personal finances.

USD/JPY added 0.1% to 146.05, hovering close to the highest level in 10 months.