The dollar edged lower on Friday, paring some of the previous day's gains, while the euro garnered support following the data that showed the euro zone economy had finally pulled out of recession in the third quarter.

The euro zone economy returned to growth in the three months to the end of September, although the quarterly rise of 0.4 percent was slightly less than markets had expected. Economists attribute this to the area's top three economies falling short of forecasts.

It's encouraging to see that the euro zone has returned to growth in the third quarter, said RBS currency strategist Paul Robson.

The euro also benefited from a broader dollar dip, which saw the U.S. currency pare some of the previous day's gains. Traders said underlying downward risks towards the dollar remained intact and this prompted pre-weekend position adjusting in those currencies where the risk is perceived greater.

Data out of China has been robust and policymakers around the world have indicated that they will keep monetary policy loose, which is broadly supportive of higher-yielding and commodity-related currencies, RBS's Robson added.

At 1239 GMT, the euro had gained 0.2 percent to $1.4876 EUR=.

The dollar index .DXY, a gauge of the greenback's performance against six major currencies, was down 0.2 percent to 75.408 after rising as high as 75.767 on Thursday.

This leaves it comfortably above a 15-month low of 74.774, but the U.S. currency remains within a well-defined downtrend channel that stretches back to May.

General risk appetite is likely to be the driver, with currency markets looking to equity and commodity markets, said Sverre Holbek, currency strategist at Danske Bank in Copenhagen.

Among perceived riskier currencies, the Australian dollar AUD=D4 gained 0.6 percent against the dollar to $0.9284 while the New Zealand dollar NZD=D4 was up 0.7 percent at $0.7371.

Against the yen, the dollar also fell 0.7 percent JPY= to 89.74 yen. However, options traders said pre-weekend 90.00 yen expiries at 1500 GMT were likely to keep dollar/yen trading not too far from that level.

Currency markets will also be following U.S. President Barack Obama's first official tour of Asia as speculation grew that this could generate pressure on some countries -- China in particular -- to let their currencies rise.

High on the agenda will be U.S. calls for Asian countries to do more to stimulate domestic demand instead of relying on exports to America, though dealers and analysts were sceptical that any change would happen soon.

With the APEC summit having concluded, but President Obama arriving in Asia for his first visit as President, Asia currency flexibility will be in focus in coming days, ING analysts said in a note to clients.

U.S. data on Friday sees the latest trade report, due at 1330 GMT, which is expected to show a deficit of $31.65 billion, compared to the $30.71 billion previous August deficit. ECONUS

Following this, attention will turn to the release of University of Michigan U.S. consumer confidence data, due at 1455 GMT, as well as a speech by European Central Bank Governing Council member Axel Weber in Berlin at 1315 GMT. ECON [M/DIARY]

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