The dollar clawed back from an all-time low against the euro Friday after a dismal showing this week amid worries about the strength of the U.S. economy.
The 13-nation euro broke through the $1.38 mark for the first time Friday, climbing as high as $1.3813 before falling back to $1.3789 in late New York trading.
The euro bought $1.3783 late Thursday.
The dollar, which has been under pressure all week, weakened Friday after the U.S. Commerce Department reported that retail sales in June fell by 0.9 percent compared with the previous month. That marked the biggest drop since August 2005, and it came as demand for cars, furniture and building supplies plummeted.
The dollar recovered some after the Reuters/University of Michigan index of consumer sentiment showed an increase to 92.4 for mid-July from 85.3 in June.
U.S. economic data are being scrutinized closely for hints on the U.S. Federal Reserve's future interest rate course.
The Fed has left its benchmark rate unchanged at 5.25 percent for a year after two years of steady increases.
The European Central Bank, meanwhile, has raised rates steadily and is expected to do so again to 4.25 percent in September. The Bank of England last week increased its benchmark rate to 5.75 percent, a six-year high.
Higher interest rates, a weapon against inflation, can bolster a currency by giving better returns on fixed-income investments.
Concerns about the strength of the U.S. economy, fueled largely by woes in the subprime housing sector, have boosted the euro against the dollar. Rising interest rates and economic slowdown in the U.S. have lead to more defaults in so-called subprime mortgages, loans to borrowers with weak or spotty credit histories.
The British pound continued to trade around 26-year highs against the dollar Friday, rising to $2.0336 from its level late Thursday of $2.0304.
The dollar slipped against the Japanese currency to 122.03 yen from 122.41 yen. On Thursday, Japan's central bank left its key interest rate unchanged at half a percent.
The Canadian dollar lost ground against the dollar Friday, having reached a 30-year high earlier this week. The U.S. dollar bought 1.0476 Canadian dollars, up from 1.0469 late Wednesday.
The dollar fell against the Swiss franc, dropping to 1.2022 from 1.2037.