The U.S. dollar fell against most major currencies on Friday after U.S. real gross domestic product (GDP) in the fourth quarter of last year was sharply downgraded from the initial estimate.

U.S. GDP increased at an annual rate of 2.4 percent in the fourth quarter of 2013, according to the second estimate released by the Commerce Department, lower than an initial estimate of 3.2 percent. However, the downgrade may be largely caused by the unusually cold weather.

The euro advanced against the dollar to the highest level this year, as eurozone inflation was above market forecast, which cooled down speculations that the European Central Bank would take more easing measures at its policy meeting next week.

The Eurostat, statistics office of the European Union, Friday estimated that consumer prices in the eurozone may rise at an annual rate of 0.8 percent this month. The figure is still well below the ECB's target of 2 percent and the same as in January and December.

More on U.S. economic front, the Thomson Reuters/University of Michigan's final reading of consumer sentiment index for February came slightly above market consensus, standing at 81.6 compared with its preliminary estimate of 81.2.

U.S. pending home sales were essentially unchanged in January, according to the National Association of Realtors, with the forward-looking indicator based on contract signings edging up 0.1 percent to 95.0 in January from an upwardly revised 94.9 in December.

In late New York trading, the euro rose to 1.3820 dollars from 1.3709 dollars of the previous session, and the British pound increased to 1.6758 dollars from 1.6684 dollars. The Australian dollar dropped to 0.8927 dollar from 0.8963 dollar.

The dollar bought 101.76 Japanese yen, lower than 102.07 yen of the previous session. The dollar moved down to 0.8785 Swiss franc from 0.8883 Swiss franc, and edged down to 1.1068 Canadian dollars from 1.1146 Canadian dollars. Endite