The dollar steadied against the euro today after falling sharply in the previous session as US trade data failed to dispel concerns about structural problems in the US economy.
The dollar initially gained ground after Thursday's data showed the US trade deficit narrowed to $56.4 billion in December from a revised $59.3 billion in November.
But the currency quickly gave up gains and fell deeper with the numbers still revealing the trade deficit for 2004 as a whole surged 24 per cent to a record $617.7 billion.
Early this morning, the dollar was steady on the day at $1.2862 per euro, compared this week's three-month high of $1.2729 and Thursday's post-trade low of $1.2906.
The dollar was also down 0.19 per cent against the yen at 105.61, after setting a three-month high of 106.86 yen on Thursday.
The euro showed little reaction to data showing France posted a trade deficit of about €7 billion in 2004, its first annual deficit in four years, or to figures from Germany showing wholesale price inflation unexpectedly slowed for a third month in January.
Trading in Asia was thinned by a holiday in Japan and Hong Kong. Banks in Singapore, Asia's second-biggest currency trading centre, opened for business after a two-day holiday that marked the Lunar New Year.
Since the start of this year, investors had pushed their earlier concerns about the US trade and budget deficits to the backburner, bringing the dollar up from December's record lows against the dollar.
But many analysts are still looking for the moment when the dollar returns to its downtrend.