LONDON - The dollar edged up against major currencies on Friday but was still headed for a weekly fall, as market speculation continues to swirl about the timing of Federal Reserve rate cuts amid signs of cooling inflation and a softening U.S. economy.

Data on Wednesday showed consumer prices rose more slowly than expected in April, but various policymakers have given little away on when rates may fall, limiting the dollar's declines this week.

The dollar index - which tracks the greenback against six peers - was up 0.2% on Friday at 104.74, but was still on track for around a half-percentage-point weekly decline.

Futures markets are currently pricing in 47 basis points of Federal Reserve rate cuts by the end of this year.

"The comments this week from Fed officials were in our view still indicative of a Fed that would be willing to turn and cut relatively quickly if the evidence becomes available to back it up," currency analysts at MUFG said in a note.

Even though markets price European rate cuts beginning in June, recent data has shown some upside surprises. Germany's economy grew more than expected last quarter and investor morale is at a two-year high.

Euro zone consumer inflation data on Friday came in at 2.4% year-on-year in April, in line with a Reuters poll.

The euro dipped 0.2% on the day to $1.084325. It is still up around 0.7% on the dollar this week.

Euro zone policymakers have increased confidence that inflation will ease back to target next year due to easing price pressures, ECB Vice-President Luis de Guindos said on Friday.

Largely disappointing Chinese data on Friday helped keep market risk sentiment in check. Factory output topped forecasts but retail sales slowed and home prices fell at their fastest pace in more than nine years.

Sterling edged 0.2% lower to $1.2649. The dollar gained 0.3% on the Japanese yen at 155.9.

In cryptocurrency markets bitcoin was up 1.5% at $66,262.

(Reporting by Iain Withers, Additional reporting by Tom Westbrook in Singapore, Editing by Timothy Heritage)