The dollar firmed on Tuesday, rebounding from steep losses a day earlier, as strong US economic data reinforced expectations of rising interest rates.
US October durable goods orders, November consumer confidence and October new home sales all exceeded expectations, according to data on Tuesday.
"Today's dollar strength was clearly a result of some of the stronger US economic data that we had this morning," said Kathy Lien, chief fundamental analyst, at Forex Capital Markets in New York.
"The good consumer confidence number suggests that the holiday shopping season could be particularly strong, especially since oil prices are still a little bit weaker. So far it's shaping up to be a positive week, US-data-wise," she added.
In late New York trading, the euro was at $1.1784, down 0.5 percent from late Monday. The euro earlier slipped to session lows around $1.1740 shortly after the consumer confidence report was released.
The dollar bought around 119.60 yen, up 0.7 percent, edging back toward Monday's 27-month peak around 119.95 yen.
Sterling was off 0.7 percent at $1.7186, while the dollar was up 0.6 percent against the Swiss franc at 1.3130 francs.
Orders for durable goods - products expected to last three years or more - rose 3.4 percent in October, compared with market expectations of a 1.1-percent increase. Revisions to September's data showed the month's declines in orders were less than originally thought.
US consumer confidence as measured by the Conference Board's index surged to 98.9 in November, compared with 85.2 in October and market expectations of a 90.0 reading.
New home sales hit a record high in October of 1.424 million annual units, up 13 percent on the month.
Markets will also look to Thursday's monetary policy meeting of the European Central Bank, which is expected to raise interest rates by 25 basis points, the euro zone's first rate hike in five years.
Prospects of an ECB rate hike, which should enhance the allure of some short-term euro zone assets, have boosted the euro in recent sessions, although the pace of future rate increases in the region is less clear.
On the other hand, the Fed is forecast to raise rates at its policy meeting in December, followed by another rise in January.
"Initially we were optimistic about the euro, because of the ECB rate hike. But what we're seeing is that US data are trumping market sentiment from that angle," said Lien of Forex Capital Markets.
The dollar's upside, however, may be limited in the near term by over-extended positioning. According to the latest positioning data from the International Monetary Market, speculative accounts are holding their largest net long dollar positions in six months.
Still, most analysts reckoned that a more sustained move lower in the dollar will be needed before the market's broadly optimistic sentiment toward the currency sours.