The dollar was narrowly mixed on Wednesday despite a slew of data showing robust US economic growth, as traders trimmed positions ahead of Thursday's expected rate boost by the European Central Bank.
"The dollar's muted reaction has something to do with positioning. Markets are extremely long dollars and that's taking the wind out of the dollar's sails," said Nick Bennenbroek, vice president of foreign exchange research at Brown Brothers Harriman in New York.
"Markets are a little cautious to be long dollars before the ECB makes an announcement tomorrow," said Bennenbroek. Long positions are effectively bets a currency will strengthen.
The ECB is widely expected to increase its key rate - the first increase in five years - to 2.25 percent from 2 percent, although analysts do not expect it to raise rates again soon.
The Federal Reserve's "beige book" summary of business conditions was the latest report that indicated a steady pace of US economic expansion.
"Consumer prices remained stable or experienced generally modest increases, but most districts reported increasing input prices," the Fed said.
The report, however, had marginal impact on the dollar, as traders sold some of their positions or cautiously held current ones before the ECB announces its interest rate decision.
In late afternoon trade, the euro was flat to marginally higher against the dollar at $1.1790, up roughly 0.1 percent from late Tuesday.
Against the yen, the euro zone single currency rose to its highest for the year around 141.34 yen, according to Reuters data, on technical buying. By late afternoon, euro/yen was trading up 0.2 percent at 141.28 yen.
The dollar was up 0.2 percent against the yen at 119.80, and up about 0.1 percent versus the Swiss franc to 1.3146 francs.
Sterling was up 0.6 percent on the day at $1.7291, lifted by trader talk of mergers and acquisition flows.
The dollar had earlier drawn support from a Commerce Department report showing that US gross domestic product in the third quarter expanded at a rate of 4.3 percent.
This was higher than the initial estimate of 3.8 percent and economists' expectations of an upward revision to 4.0 percent.
The euro had slipped to session lows of $1.1755 shortly after the GDP data but then drifted back up after the Chicago purchasing management index was released.
The Chicago PMI for November came in at 61.7, slipping a bit from the previous month but above economists' forecasts of a 60.0 print.
But both reports, though positive overall, sent mixed signals on interest rate expectations, analysts say. GDP data showed a more benign increase in the core personal consumption expenditures, the Fed's favoured measure of inflation, while the Chicago PMI prices paid index shot up to a 26-year high.