The dollar slipped away from recent multi-week peaks against the euro and yen on Tuesday as a brief United Airlines security scare and a strong German business survey pushed it back a bit ahead of key US data.
Following a steady start in Europe, the greenback dipped after a surprisingly robust Ifo survey and news United Airlines flight UA840 to Los Angeles had to turn back to Sydney after a note raising fears of a bomb threat was found on board.
The reversal proved fairly mild as markets awaited US consumer confidence data at 1400 GMT, the start of a key data period that could determine whether markets buy into the economic optimism Federal Reserve chief Alan Greenspan expressed last week.
"(The United flight) made the initial start of the move upward in euro/dollar but it petered out relatively swiftly.... The Ifo took on from that," said Neil Mellor, currency strategist at Bank of New York.
At 1130 GMT the dollar stood around $1.2170 to the euro, down almost a quarter percent on the day and about a cent below the peak of nearly four weeks it set on Friday.
The US currency also traded a touch lower at 109.75 yen and 1.2628 Swiss francs.
The Ifo institute said its German business climate indicator rose to 95.6 from 94.6, beating the consensus in a Reuters poll of economists for an increase to 95.0
"It was a good Ifo number, so it helped to elevate the euro, but it's not going very far. Basically we're awaiting data from the US over the next days," said Peter Fontaine, currency strategist at KBC in Brussels.
"We have had some terrorist talk with the Democrats' convention in the US, the Olympics and now the airplane story... people say 'let's wait a bit before we buy dollars' and immediately you get a shift in the balance but it's nothing drastic."
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