The euro fell from yesterday's four-week high against the dollar today as buying ahead of US trade data ebbed but analysts said the US currency remained vulnerable to signs of growing trade deficit.
Earlier, the euro was trading at $1.2187, compared with yesterday's high of $1.2256.
The US figures, due at 1230 this afternoon, is expected to show the near-record deficit rising to $57 billion in May from $56.96 billion in April.
"We have a technical move today after such a sharp fall in the last few days," said David Mann, currency strategist at Standard Chartered in London.
"What people are really focusing on is the US trade data and there is a risk of a wider than expected number which would start reminding people of the structural forces."
So far this year, the dollar has shaken off concerns about persistent imbalances in the US economy, namely the current account shortfall, and gained 10 per cent versus the euro as investors sought to benefit from rising US interest rates.
But analysts have warned that the dollar could still resume its long-term downtrend, which it brought it down 30 per cent versus the euro over the last three years, because of the large US trade and budget deficits.