The dollar edged lower on Friday, paring some of the previous day's gains following a bout of profit-taking in perceived riskier currencies, with focus on the release of euro zone gross domestic product data.
The U.S. dollar gained on short-covering on Thursday, prompted by softer equities and a fall in oil, but this petered out, with most in the market believing the broad trend towards dollar weakness remains intact.
Figures due at 1000 GMT are expected to show the euro zone economy leapt out of recession in the third quarter and analysts believe this could give the euro a boost. A Reuters poll forecasts the data will show a 0.5 percent quarterly rise over the period.
GDP data out of Germany has already been released and showed a 0.7 percent quarterly rise, while the French economy also grew by 0.3 percent in the third quarter, although this was slower than forecast.
The euro zone GDP data will be the main focus for today, and the euro could see some support if we get the confirmation that the euro zone has come out of recession, said Sverre Holbek, currency strategist at Danske Bank in Copenhagen.
But otherwise general risk appetite is likely to be the driver, with currency markets looking to equity and commodity markets, he added.
Markets will also be watching for the release of University of Michigan U.S. consumer confidence data at 1455 GMT, as well as a speech by European Central Bank Governing Council member Axel Weber in Berlin at 1315 GMT.
At 0853 GMT, the euro had gained 0.3 percent to $1.4888 EUR=. The single currency fell 1 percent on Thursday, coming under pressure due to broad dollar strength and as sources said Germany could be set to inject capital into WestLB [WDLG.UL].
The dollar index .DXY, a gauge of the greenback's performance against six major currencies, fell 0.3 percent to 75.408 after rising as high as 75.767 on Thursday.
This leaves it comfortably above a 15-month low of 74.774, but the U.S. currency remains within a well-defined downtrend channel that stretches back to May.
The dollar short-covering seems to be losing steam and the dollar bear market looks like it's coming back. But it's hard to bet on a certain direction and build large positions now, said Jun Kato, senior chief analyst at Shinkin Central Bank Research Institute in Tokyo.
Among perceived riskier currencies, the Australian dollar AUD=D4 gained 0.6 percent against the dollar to $0.9282.
The dollar also dipped 0.2 percent against the yen JPY= to 90.14 yen.
Currency markets will also be following U.S. President Barack Obama's first official tour of Asia as speculation grew that this could generate pressure on some countries -- China in particular -- to let their currencies rise.
High on the agenda will be U.S. calls for Asian countries to do more to stimulate domestic demand instead of relying on exports to America, though dealers and analysts were sceptical that any change would happen soon.
With the APEC summit having concluded, but President Obama arriving in Asia for his first visit as President, Asia currency flexibility will be in focus in coming days, ING analysts said in a note to clients.