U.S. one-hundred dollar bills are seen in this photo illustration at a bank in Seoul

U.S. one-hundred dollar bills are seen in this photo illustration at a bank in Seoul (KIM HONG-JI, / November 12, 2014)

The dollar gained on Friday as sliding oil prices stirred disinflation fears in the euro zone and Japan, while investors also looked ahead to a heavy week of central bank meetings and the U.S. monthly employment report.

U.S. crude fell 10 percent on Friday on OPEC's decision not to cut output, settling at $66.15 a barrel.

Annual consumer inflation in the euro zone cooled to a five-year low as energy prices fell, suggesting deflation remains a real threat for the European Central Bank. Japan's annual core consumer inflation also slowed for a third straight month in October.

"The expectation that oil prices are going to remain under pressure at least for the next few months, and the disinflation data that came out, confirms that both Japan and the eurozone are struggling with disinflationary pressures that are quite severe. That helped the U.S. dollar stand out," said Martin Schwerdtfeger, a foreign exchange strategist at TD Securities in Toronto.

The euro weakened to $1.2442. The single currency is under pressure ahead of next week's ECB meeting, where the central bank is expected to signal further action to ward off disinflation.

Central bank meetings are also due in England, Canada and Australia, while the United States will focus on Friday's employment report for November.

The dollar neared seven-year highs against the yen, last trading at 118.68 yen . The dollar index , which measures the greenback against a basket of major currencies, gained 0.79 percent to 88.301, just below four-year highs of 88.44 set on Monday.

Thursday's decision not to cut oil output slammed the currencies of oil producing nations.

The Russian rouble weakened to more than 50 to the U.S. dollar in late Friday trade, setting a new all-time low.

The U.S. dollar rallied to more than seven Norwegian crowns for the first time in more than five years.

Investors unwinding positions for year-end may pause the dollar rally, though rising geopolitical tensions if oil prices stay low could favor the greenback.

"It causes pain in a lot of countries ... the response you would expect is not just market volatility, but over the medium-term geopolitical volatility," said Greg Anderson, global head of FX strategy for BMO Capital Markets in New York.

(Editing by Richard Chang and Chris Reese)