The U.S. trade deficit contracted by the most in nearly 14 years in November as slowing domestic demand amid higher borrowing costs depressed imports.

U.S. private payrolls increased more than expected in December, pointing to still-strong demand for labor despite higher interest rates.

Oil prices rose around 1% on Friday, extending gains from the previous trading session after data showed lower fuel inventories following a winter storm that hit the United States at the year end.

The dollar held near an almost one-month high on Friday, after U.S. economic data highlighted a still-tight labour market that could keep the Federal Reserve on its aggressive rate hike path.

Euro zone business activity contracted less than initially thought at the end of last year as price pressures eased, according to a survey which suggested the bloc's recession may not be as deep as expected.

The U.S. manufacturing sector shrank by more than expected in December and contracted for the second straight month, according to numbers on Wednesday that were released at the same time as key labor market data.