The dollar dipped versus the euro on Monday as investors grew wary ahead of US capital flows data, which will show whether the world's largest economy is attracting enough foreign capital to cover its trade deficit. The dollar hit record lows against the euro late last year due to concerns the US may find it difficult to bring in the cash it needs to offset outflows in its current account.
The greenback has gained 9 percent against the euro this year, however, as the focus has shifted to the brightening US interest rate outlook.
US Treasury International Capital (TIC) flow data for April showed a net $47.4 billion was invested from abroad in US securities, far short of the month's $57 billion trade deficit. May TIC data is due at 1300 GMT.
"The main focus today is the TIC data and the market is looking for a bit of a rebound from the previous month, but we would suggest some caution," said Ian Stannard, senior foreign exchange strategist at BNP Paribas.
Several banks are forecasting net capital inflows of at least $60 billion in May. BNP Paribas was forecasting inflows of $55 billion. At 1140 GMT, the euro was trading at $1.2050, up 0.15 percent from Friday's close but off earlier session highs of $1.2085.
The euro was unmoved by data on Monday showing eurozone final annual inflation for June in line with initial estimates at 2.1 percent.
The dollar steadied against the yen at 112.29, less than half a yen below recent 14-month highs.
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