The dollar rose against the euro today to build on the previous day's gains after regional factory data and a rebound in US stock prices cast doubt on predictions for a slowdown in the US economy.
The dollar also got a boost after the euro slid against the yen following comments from Federal Reserve chief Alan Greenspan that added to a chorus of top US officials calling for China to relax its currency's peg to the dollar.
The dollar had reversed a week-long slide against the euro yesterday after an upbeat reading in the Philadelphia Federal Reserve's manufacturing index for the mid-Atlantic region suggested the economy was humming along, traders said.
The rise suggests the market still has its eye on cyclical factors such as interest rates rather than structural factors like deficits, said Tomoko Fujii, senior currency strategist at Bank of America, in a research report.
She said the dollar should rise moderately against the euro in the coming few months.
Earlier, the euro fetched around $1.3035 - down slightly from $1.3047 in late US trade. It fell around 0.2 per cent yesterday but was still up nearly three cents from two-month lows around $1.2770 set last week.