The U.S. dollar rose to a near 9-month high against the euro on Thursday as the single currency was dogged by worries about sovereign debt levels and poor growth prospects, while gold fell after the International Monetary Fund said it would sell more of its bullion holdings.
The planned gold sales also pressured the Australian dollar, though the IMF said the selling would be spread over time.
Shares in Japan edged higher as a weaker yen helped exporters' stocks, but profit taking capped gains after the Nikkei booked its best rise in more than two months in the previous session.
Investors were focused on the relative speed at which the world's economies were recovering from recession and punishing laggards such as some European economies.
Several Federal Reserve policy makers, confident in a U.S. recovery, want to begin selling securities relatively soon to cut back massive help to the financial system, the central bank said overnight.
The U.S. took a very aggressive response to the crisis (monetary, bank recapitalization, fiscal) and while there are costs to these measures, they will likely result in a faster exit from the recession, Michael Hasenstab, senior vice president and co-director of Franklin Templeton's fixed income group, told Reuters in a chat room interview.
Hasenstab, who oversees some $60 billion in assets, said he was underweight the euro and has no exposure to Greek bonds.
The euro slipped 0.2 percent to $1.3572, within striking distance of last week's 9-month low of around $1.3530.
The U.S. dollar index <.DXY> rose 0.3 percent against a basket of other major currencies.
But the Australian dollar sagged 0.3 percent to US$0.8960, near the middle of a $0.9400 to $0.8575 range carved out in the last four months.
Gold tumbled 0.4 percent to $1,101.50 an ounce after peaking at $1,126.85, the highest since January 20, before the IMF news on gold sales.
The precious metal has posted gains in every year since 2000 and last year surged 25 percent.
In the medium term, I don't think (the IMF news) is going to have a discernible impact. I think gold is still a viable asset because I expect the global economy to recover in the second half, said Jacob Oubina, a senior currency strategist at Forex.com, in New Jersey.
In equity markets, the Nikkei share average rose 0.15 percent <.N225>, but unable to gather much follow through after Wednesday's 2.7 percent pop.
The MSCI index of Asia Pacific stocks outside Japan slipped 0.4 percent <.MIAPJ0000PUS>, weighed down by a 1.1 percent fall in the materials sector.
The stronger U.S. dollar weighed on commodities and materials stocks, with U.S. crude futures down 0.4 percent to $77.03 a barrel.
The Reuters-Jefferies CRB index of 19 commodity futures <.CRB> is down 3.4 percent so far this year.
(Additional reporting by Risa Maeda in NEW YORK)
(Editing by Kim Coghill)