The dollar retreated from an earlier one-week high against the euro today ahead of data that is expected to show the US current account deficit widened to a record level in the fourth quarter.
The dollar failed to hold onto gains after it spiked up in New York trade on Tuesday after data showed the United States attracted enough overseas investment to finance its trade deficit in January.
Concerns about the US current account gap have contributed to the dollar's three-year decline. "The market is focusing back on the current account data coming out this afternoon. Data yesterday was quite strong but the concern about the structural problems is deep-rooted," said Mr Niels Christensen, senior currency strategist at Societe Generale in Paris.
The data, due out this afternoon, is expected to show a widening in the deficit to $181.90 billion in October-December from a record $164.71 billion in the previous quarter. Earlier, the euro was up a third of a per cent on the day at $1.3356 after hitting a one-week low of $1.3292 in Asia.