Higher US Treasury yields and solidifying expectations of a rise in interest rates this month helped the dollar recover some ground on Thursday after its weakest run in more than a year.
The dollar index has had its weakest fortnight since March of last year due to improving euro zone data at a time when US equivalents have looked shaky and belief is evaporating that the Trump administration would help boost growth and inflation.
Traders said the wait for jobs numbers on Friday may provide the dollar with some respite, and the greenback gained just over 0.1 per cent against the basket of currencies used to measure its broader strength in early European trade.
But those gains were chiefly against the yen and a weakened British pound, and few analysts are willing currently to bet against the euro.
“We saw some profit-taking on the euro this week because of worries over Italy and Greece and some dovish comments from (European Central Bank chief) Mario Draghi,” said Athanasios Vamvakidis, head of G10 FX strategy at Bank of America Merrill Lynch in London.
“It is interesting how fast it rebounded. People are clearly trying to buy the dips (in the euro). But for now we may just see a wait for the non-farm payrolls numbers tomorrow.”
By 0745, the dollar was up 0.1 per cent at $1.1233, around a third of a cent below last week's 6-1/2 month high of $1.1268. It gained 0.2 per cent to 110.92 yen and $1.2865 per pound, respectively.
The big mover in Asian time was the Australian dollar, hit by a private survey showing Chinese manufacturing activity unexpectedly shrank in May.
The Caixin report, which tends to focus on smaller firms, contrasted sharply with official readings on Wednesday that had shown steady manufacturing growth in China, and the Aussie slid as much as 0.5 per cent in response.
It had reined in some of those losses to stand 0.25 per cent lower at $0.7384 in European trade.
China's yuan, by contrast, remained firm even after the weak factory activity reading, officially guided onshore rates touching their highest in nearly seven months.
Sterling, on a rollercoaster ride this week as polls send conflicting signals about next week's national election, eased 0.2 per cent to $1.2871, edging away from Wednesday's intraday high of $1.2921.
Another poll overnight showed Prime Minister Theresa May's lead at just 3 points and her overall majority now firmly in question. Others say she is still 10 points or more in front and will win solidly.
Betting markets still put the probability of a win for May's Conservatives at more than 90 percent and the pound is trading almost a cent above the past week's lows.
“You get the feeling that the pound just wants to go higher but keeps on getting knocked back down again,"
“Be it a poll showing Labours deficit eroding or data out this morning from the Nationwide showing that the UK house prices have slipped for the third month in a row. (Against the dollar) the pound just seems to be hitting a wall.”