The euro backed off from a 20-month high against the dollar and another record peak versus the yen today, buffeted about by further comments on the single currency's strength.
The yen was supported by surprisingly strong Japanese industrial output data that raised expectations the Bank of Japan might raise interest rates as early as December.
After a succession of European policymakers and some ECB officals sounded a sanguine note earlier this week on the euro's latest leg higher, French Prime Minister Dominique de Villepin said the single currency's recent rise was weighing on comptitiveness.
French finance minister Thierry Breton said strong movements in currencies are never good, reiterating a call for collective vigilance.
But EU economic and monetary affairs commissioner Joaquin Almunia stuck with the mostly relaxed comments on the currency, saying there was no reason to be alarmed by current levels.
"You can argue how far any rhetoric from French officials will take things, but it might just act as a bit of a constraining factor on the topside," Rabobank strategist Jeremy Stretch said.
"Markets are just looking to consolidate as the air looks a bit thin up there in the short term," he added.
Earlier, the euro was down a third of a per cent on the day against the dollar at $1.3160, having it its strongest levels since March 2005 at $1.3218.
Against the yen, the euro had hit 153.45, its highest since the single currency was launched in 1999, before coming back to 152.87.
Sterling rose to a 2-year high of $1.9545, a few ticks away from levels hit just before the 1992 sterling crisis, when Britain had to abandon its participation in the European Exchange Rate Mechanism and sterling collapsed.
US durable goods orders posted their biggest decline since July 2000 on Tuesday and consumer confidence fell, weighing on dollar sentiment, boosting expectations the Federal Reserve may cut interest rates early next year.