The dollar lost a third of a per cent against the euro today as investors adjusted positions ahead of key US retail sales data.
The greenback rallied earlier this week after the Federal Reserve raised interest rates and maintained its upbeat assessment of the economy.
But it gave back some of its gains as investors awaited more evidence of strong economic growth to see if they confirm the Fed's optimistic view.
"We are just bouncing around in this range, but people are focusing on the July retail sales after the weak July payrolls," said Mr Aziz McMahon, currency strategist at ABN AMRO.
The euro rose to $1.2273 by this morning, retracing half of its losses made since Tuesday's US rate rise. The yen was steady at 110.60 per dollar.
US July retail sales are due this afternoon. Sales are expected to rise 1.1 per cent, after falling 1.1 per cent in June.
Excluding autos, sales are expected to rise 0.4 per cent.
An unexpectedly small rise in July non-farm payrolls knocked two cents off the value of the dollar against the euro on Friday.
World oil prices stayed close to record levels today, another potential negative for the petroleum-hungry US economy.