The dollar fell on Wednesday after four sessions of gains, weighed down by worries about gridlock in Washington on the U.S. budget that could lead to a government shutdown next week.
Congressional officials must reach a budget deal by Monday that would allow the government to keep running, but negotiations have been contentious so far.
There is also an approaching deadline for lawmakers to raise the nation's $16.7 trillion debt limit by mid-October, and once again U.S. politicians are deeply divided on how to extend the Treasury's borrowing authority.
A lack of clarity over how long the U.S. central bank will delay scaling back stimulus has also weighed on the dollar.
The euro traded up 0.4 percent above $1.35, not far from last week's high of $1.3569, hit after the Federal Reserve's surprise decision to keep its bond-buying stimulus intact. Traders reported strong chart support at $1.3450.
The dollar was 0.20 percent weaker under 99 yen, but notched gains against higher-yielding and riskier currencies as investors grew wary about the showdown in Washington.
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