The euro slipped on Monday after posting its biggest weekly rise in a month as traders took profits, though markets were wary of chasing the currency lower before an European Central Bank policy meeting next week.
With some political uncertainty in the form of an approaching deadline over Catalonia's bid for independence and Austria's election outcome, investors moved to the sidelines.
“ECB expectations will be the main driver for the euro and we see the overall trajectory of the euro higher, though there may be some consolidation after the heavy buying in recent weeks,” said Manuel Oliveri, an FX strategist at Credit Agricole in London.
The single currency fell 0.3 per cent to $1.1780 in early trades. It rose 0.8 percent last week, its biggest weekly rise in a month, according to Thomson Reuters data.
Catalonia independence
Catalan leader Carles Puigdemont has until 10:00 a.m. local (0800 GMT) on Monday to clarify whether he is calling for the region's independence from Spain, with Madrid threatening a return to direct rule if his stance remains ambiguous.
Austria's young conservative star Sebastian Kurz is on track to become the country's next leader after an election on Sunday. He will likely seek a coalition with the resurgent far right as his party is far short of a majority.
Five people with direct knowledge of discussions told Reuters last week the ECB is homing in on extending its stimulus for nine months at the next meeting, while scaling it back.
But the euro's losses have been limited thanks to a broadly muted dollar as subdued inflation data raised expectations the US Federal Reserve will not strike an overtly hawkish tone at its policy meeting at the end of the month.
Although US consumer prices rose the most in eight months in September, as gasoline prices soared in the wake of hurricane-related refinery disruptions, underlying inflation remained muted.
The dollar index rose 0.1 per cent to 93.21, lacking momentum after falling last week.