The U.S. dollar weakened against major currencies on Friday, as the country's falling new home sales in July somewhat eased concerns that the U.S. Federal Reserve would scale back its monetary stimulus soon.

The dollar initially strengthened against a basket of currencies as the yield on the 10-year U.S. Treasury rose, but it turned weaker in later trading session, surrendering gains against its peers after the report of U.S. new home sales.

Sales of new single family houses in July were 394,000 at a seasonally adjusted annual rate, down 13.4 percent from June's revised rate, the U.S. Commerce Department said.

"This is the weakest reading in nine months, suggesting new home sales have lost momentum. The large contrast of existing and new home sales in July also implies would-be home owners' sensitivity to interest rates," Mei Li, an economic Analyst at FTN Financial, said.

U.S. existing-home sales rose strongly in July, increasing 6.5 percent to a seasonally adjusted annual rate of 5.39 million from a downwardly revised 5.06 million in June, the National Association of Realtors reported on Wednesday.

In late New York trading, the euro rose to 1.3381 dollars from 1.3353 dollars of the previous session, and the British pound decreased to 1.5573 dollars from 1.5585 dollars. The Australian dollar went up to 0.9031 dollar from 0.8999 dollar.

The dollar bought 98.68 Japanese yen, higher than 98.58 yen of the previous session. The dollar moved down to 0.9219 Swiss franc from 0.9238 Swiss franc, and it dipped to 1.0510 Canadian dollars from 1.0525 Canadian dollars.