The dollar was hemmed in narrow ranges on Friday as investors tried to assess how quickly the US central bank was likely to raise interest rates after a widely-expected increase next week.
The Federal Reserve is tipped to hike rates next Tuesday by a quarter-point to 1.75 percent in what would be its third rate rise in consecutive meetings.
The dollar was buoyed by robust economic data earlier this week but soft US inflation and manufacturing activity indicators on Thursday have cast fresh doubt over whether the Fed will maintain its recent pace of monetary tightening.
"The Fed will really have to surprise the market to make a big move," said Niels Christensen, currency strategist at Societe Generale in Paris.
"But everything indicates it's going to be a similar statement to the last meeting. They will probably maintain that they are going to tighten at a measured pace ... There's no reason to rock the boat."
The euro was up 0.2 percent at $1.2215 by 1145 GMT, recovering from a one-week low below $1.2120 set on Thursday and moving back to the middle of this month's trading range.
The dollar was 0.25 percent firmer at 109.85 yen as the Japanese currency eased across the board after a strong performance at the start of the week.
The University of Michigan releases its preliminary consumer sentiment index for September at 1345 GMT. The survey is expected to show the consumer mood improved slightly from August, to give a reading of 96.5 after August's 95.9. It will be closely watched after weaker than expected Philadelphia Federal Reserve manufacturing data on Thursday.
US interest rates are currently 1.5 percent, still half a percentage point below eurozone rates even after two US hikes since late June. Low US interest rates were a key factor behind the dollar's fall to record lows against the euro earlier this year as investors sought higher returns elsewhere.
Although many foreign exchange dealers expect rates to reach 2 percent by the year-end, US interest rate futures markets have begun to price in the possibility the Fed may not raise rates at its policy meetings in November and December. The Fed does not meet in October.
The euro was around 0.6 percent firmer against the yen at 134.30 as investors unwound long yen positions put on earlier this week.
Speculation an upcoming G7 meeting could put pressure on Asia countries to revalue their currencies gave the Japanese currency a boost earlier in the week but dealers were keen to close positions ahead of the weekend.
"Short-term speculators were buying the yen as there was a view that Asian currencies were looking quite good but now they are unwinding those positions," said Derek Halpenny, currency economist at Bank of Tokyo Mitsubishi.
In the eurozone, the Financial Times Deutschland newspaper reported on Friday the International Monetary Fund would warn the European Central Bank against raising interest rates soon.