The dollar held near three-week highs on Friday after better-than-expected retail sales numbers in the United States boosted bets on the strength of the U.S. economy and earlier monetary policy tightening.
The euro pulled itself into positive territory by the European mid-morning but at $1.1783 remained close to a three-week low.
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U.S. retail sales unexpectedly increased in August, data showed on Thursday, rising 0.7% from the previous month despite expectations of a 0.8% fall. A business sentiment survey also showed a big improvement.
The figures revive expectations for an early tapering of its asset purchases by the Federal Reserve, which has its two-day policy meeting next week.
The more bullish reading of the U.S. economic outlook faces another test on Friday with the release of the University of Michigan's consumer sentiment index.
The dollar index last stood at 92.818 down slightly on the session but near Thursday's three-week high of 92.965.
Currency markets were generally quiet on Friday with traders reluctant to take on new positions ahead of a clutch of important central bank meetings next week including the Fed, the Bank of Japan and the Bank of England.
"Despite the ongoing China Evergrande saga plus views from many that equities are due a correction, risk sentiment remains surprisingly supported. Expect another quiet FX trading session before a busy week of central bank meetings," ING analysts said.
The Swiss franc steadied after hitting a five-month low versus the dollar of 0.9280 francs.
The dollar rose 0.2% to 109.99 Japanese yen, having gained 0.34% on Thursday to rise off Wednesday's six-week low of 109.11.
The yen has shown a limited reaction to the ruling Liberal Democratic Party's leadership race, which formally kicks off on Friday ahead of a Sept. 29 vote. The LDP's parliamentary dominance means the party's new leader will become prime minister.
The Chinese yuan recovered slightly after Thursday's 0.4% fall.
The offshore yuan traded at 6.4526 to the dollar, pressured by growing worries about China's real estate sector as investors fear property giant China Evergrande could default on its coupon payment next week.
The Evergrande saga follows a series of regulatory clampdowns in China that has knocked investor confidence in the local stock market, as well as signs growth there is slowing.
"The continued uncertainty over news out of China, with anything from tech to property firms taking a hit, has yet to offer much of a blow to ongoing risk sentiment but must be closely watched for signs of contagion," said Jeremy Thomson-Cook, chief economist at business payments firm Equals Money.
Still, on a trade-weighted basis, the yuan stood near its highest level in five years, both in the onshore and offshore market.
The British pound slipped 0.1% to $1.3784 as UK retail sales undershot expectations. However, with investors bringing forward forecasts for a Bank of England interest rate hike to mid-2022, sterling remains supported and is near one-month highs.