LONDON—The dollar retreated slightly on Friday but was still on course to gain over the week before the release of U.S. labor data that investors think could reinforce the case for early Federal Reserve interest rate hikes. The euro rose 0.13 percent to $1.1315 in morning trading in Europe but was down about 0.5 percent for the week against the greenback. At 0912 GMT, the dollar index which measures the greenback against major peers, was down 0.14 percent at 96.126 and set for weekly gains of about 0.5 percent. The yen has been the most prominent casualty of the dollar’s strength in the first trading week of the year, as investors reckon the Bank of Japan will lag others on rate hikes. The greenback hit a five-year peak on the yen at 116.35 on Tuesday and hovered around 115.81 on Friday. It is up about 0.6 percent on the yen …