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The U.S. dollar tumbled to a one-year low against a basket of currencies on Friday while the euro hit a one-year peak, as traders ramped up expectations of an imminent end to the U.S. Federal Reserve's rate-hike cycle on signs of cooling inflation.

Data from the U.S. Labor Department on Thursday showed the producer price index (PPI) fell by the most in nearly three years last month, coming a day after inflation data pointed to moderation in consumer prices.

The greenback took another leg down on Friday and the U.S dollar index, which measures the currency against six major peers, tumbled to a roughly one-year low of 100.78.

It was last 0.15% lower at 100.82, and was headed for a weekly decline of more than 1%, its steepest since January.

Meanwhile, the euro rose to a fresh one-year top of $1.1075, pushing past Thursday's previous high.

"The easiest way to express a dollar negative view has been with the euro," said Ray Attrill, head of FX strategy at National Australia Bank.

"The significant downside surprise in U.S. PPI has made people a bit more convinced of the view that the Fed will (soon) be done ... and (strengthened) conviction that inflation will allow the Fed to be cutting rates before the end of the year."

Similarly, the British pound hit a 10-month high of $1.2545.

Money markets are pricing in a 69% chance the Fed will raise interest rates by 25 basis points next month, though a series of cuts are also being priced in from July through to the end of the year, with rates seen just above 4.3% in December.

Adding to signs that global inflationary pressure is waning was an unexpected surge in Chinese exports, which in March shot up 14.8% from the same month a year earlier, stunning economists who predicted a 7.0% fall in a Reuters poll.

The upbeat Chinese data, alongside a robust March employment report in Australia, kept the Australian dollar supported at around $0.6788 on Friday, having surged 1.3% in the previous session on the back of the data releases. The Australian and New Zealand dollars are often used as liquid proxies for China's yuan.

"It was almost like a perfect positive storm for the Aussie," said Attrill. "Starting with the employment numbers ... and the China trade numbers which looked exceptionally good.

"You layer on top of that, the dollar weakness from the data last night and positive risk sentiment, and it was a (raft) of good news for the Aussie."

The New Zealand dollar similarly gained 0.21% to $0.6310, after jumping 1.3% on Thursday.

Elsewhere in Asia, Japan's yen rose more than 0.1% to 132.39 per dollar, while the offshore yuan gained 0.3% to 6.8495 per dollar.