Oct 20 (Reuters) - ICE cotton futures fell to a two-month low on Friday, weighed by fund selling, harvest friendly weather and a stronger dollar.

Cotton contracts for December settled down 0.43 cent, or 0.64 percent, at 66.88 cents per lb. Earlier they had hit a low of 66.84 cents per lb, the lowest since Aug. 18.

For the week, the contract slipped about 2.5 percent to register its biggest percentage fall since the week of Sept. 15.

"We are going to have a lot of cotton around and the only way we can sell is at cheaper price ... The funds are caught and they are liquidating," said Jobe Moss, a broker with MCM Inc in Lubbock, Texas. "The dollar is strong and there's perfect weather due to which we're seeing the harvest picking up steam so there is more cotton being harvested. These have put a negative quilt on the market," Moss added.

Speculators cut their net long position in ICE cotton by 3,137 contracts to 48,748 contracts in week to Oct. 17, Commodity Futures Trading Commission data showed. Total futures market volume rose by 4,687 to 24,220 lots. Data showed total open interest fell 1,455 to 228,172 contracts in the previous session. Certificated cotton stocks deliverable as of Oct. 19 totaled 2,995 480-lb bales, down from 3,586 in the previous session. The dollar index was up 0.47 percent. The Thomson Reuters CoreCommodity CRB Index , which tracks 19 commodities, was up 0.02 percent.

(Reporting by Eileen Soreng in Bengaluru; Editing by Meredith Mazzilli)