The dollar bobbed near this month's highs against the euro and yen on Thursday after upbeat comments from Federal Reserve officials reinforced expectations of higher US interest rates.
But investors were reluctant to extend the dollar's gains ahead of Friday's key US employment report and a speech by Fed Chairman Alan Greenspan later in the day.
Greenspan is due to speak via video link at a St Louis Fed conference at 1830 GMT and investors are keen to hear if he extends his remarks to the strength of the US recovery.
"Our indicators show the market is still short of dollars which means there could be more juice left in the dollar's recovery," said Shahab Jalinoos, senior currency strategist at ABN AMRO. "With payrolls and more Fed speakers coming up, we could see another spurt higher."
The euro showed little reaction to the European Central Bank's decision to leave interest rates at 2.0 percent, as widely expected.
Europe's single currency stood at $1.2290 at 1200 GMT, around half a cent from two-week lows set on Wednesday. The dollar was virtually unchanged against the Japanese currency at 111.22 yen.
The Bank of England also opted to leave rates on hold. The decision to keep UK interest rates at 4.75 percent had been well flagged amid growing evidence that five rate hikes over the past year have slowed Britain's economy and its once-booming housing market.
The Federal Reserve has raised interest rates three times since late June, bringing the benchmark federal funds rate to 1.75 percent.
St. Louis Fed chief William Poole said on Wednesday the "neutral level" of Fed interest rates - which neither spurs economic growth nor drags on it - probably lies between 3 and 5 percent and the Fed would not automatically stop tightening if rates reached those levels.
Kansas City Fed President Thomas Hoenig said record oil prices would exert only a modest impact on US growth, adding that growth looked set for a solid performance over the next 18 months.
"If you look at Fed comments recently they've all been on the hawkish side reinforcing the idea the Fed is going to move rates back towards more neutral levels," said Ian Stannard, currency strategist at BNP Paribas.
US weekly jobless claims are due at 1230 GMT and are forecast to show a total of 350,000 new filings compared with 369,000 in the prior week.
US House and Senate negotiators agreed late Wednesday on a corporate tax bill which includes a one-year window for US multinationals allowing them to bring home foreign earnings at a reduced tax rate.
Analysts were divided on the significance of the move, with some estimating it could lead to billions of dollars flowing back into the US over the year and others more sceptical it would lead to any meaningful support for the dollar.