The dollar held within recent ranges against the euro on Friday as markets waited for a slew of US economic data on manufacturing and producer prices, while talk China may soon revalue its currency boosted the yen.
Analysts said the data, including June producer prices and the New York Federal Reserve's manufacturing survey for July all due at 1230 GMT, should paint a picture of a gradual recovery in the US and support expectations of more interest rate hikes.
"We have a number of interesting releases today and we are looking for a picture of continued recovery," said Peter Fontaine, analyst at KBC in Brussels.
At 1200 GMT the dollar traded steady on the day at $1.2080 per euro, compared with this week's one-month low of $1.2256 and a 14-month high of $1.1866 set at the beginning of this month.
The dollar fell a third of a percent against the yen to 111.93 yen, more than half a yen below 14-month highs set last week.
Earlier on Friday, the euro won some support after comments from European Central Bank policymaker Nout Wellink dampened speculation of a eurozone rate cut.
Cutting interest rates "is not on my mind", Friday's International Herald Tribune quoted Wellink as saying. Following the comments, the euro rose as high as $1.2137.
"Wellink is a known hawk but these comments were still hawkish and gave the euro a little bit of a lift this morning," said Paul Mackel, currency strategist at ABN Amro.
Meanwhile, the Financial Times reported on Friday that the Bush administration had told two key senators that it expects China to revalue the yuan in August, before President Hu Jintao visits Washington in September. Reform of the yuan is expected to have a positive knock-on effect on other Asian currencies.
However, a spokesman for the State Administration of Foreign Exchange, China's currency regulator, restated Beijing's long-held stance that there was no timetable for a possible change in the yuan's peg.
"There is a lot of focus on the FT article regarding China but one-month NDFs haven't moved much with the story. The rumour itself was already going through Asia at the start of the week," said Mackel.
Non-deliverable forwards (NDFs) are cash-settled forward contracts taken out on thinly traded or non-convertible currencies.
Friday's US data releases follow strong retail sales data on Thursday, which came on the heels of data showing improvement in the giant US trade and budget deficits that have long dogged the currency.