The dollar fell off an 11-month high as the Philadelphia Federal Reserve's gauge of U.S. Mid-Atlantic business activity fell.
The dollar steadied against a basket of currencies as risk aversion sparked by concerns over a U.S.-China trade feud ebbed.
The dollar remained close to an 11-month high against a basket of currencies on Tuesday as domestic housing starts jumped to near an 11-year peak in May
The euro stabilized on Monday after last week's big losses.
The U.S. dollar slipped against the Japanese yen on Friday, as President Donald Trump announced hefty tariffs on $50 billion of Chinese imports.
The euro fell broadly on Thursday as the European Central Bank planned to keep interest rates at record lows into the summer of 2019.
The dollar was weaker against the euro but rose against some emerging market currencies and the yen.
The dollar steadied as data showed U.S. consumer prices rose in May, matching analysts' forecasts and reinforcing the view the Federal Reserve would raise short-term interest rates gradually.
The U.S. dollar and euro were range-bound ahead of decisive meetings of both central banks this week.
The dollar extended gains on Friday but is set for its biggest weekly drop in 11 weeks.
The euro climbed to a three-week high as investors raised their bets that the ECB will next week signal a winding down of its vast bond-buying program.
The euro rose to a nearly two-week high against the dollar on Wednesday after officials said the European Central Bank could wind down its stimulus program by the end of the year.
The euro jumped on Tuesday following a report that the European Central Bank will debate winding down its quantitative easing program.
The dollar fell to a two-week low on Monday, as global trade concerns resurfaced.
The U.S. dollar inched up on Friday following the release of expectation-beating employment data.
The euro won a reprieve on Thursday, holding on to its big gains made the previous day as Italy moved to calm political turbulence.
The euro recovered on Wednesday from 10-month lows after reports that Italy's biggest party would make a renewed attempt to form a coalition government.
Investors piled into safe-haven bets on Tuesday as political turmoil in Italy sparked fears of another euro crisis.
The euro crawled off a 6-1/2-month low against the dollar on Monday, catching its breath after last week's steep decline.
The dollar rose against a basket of peers on Wednesday, to its highest since mid November, helped by gains against commodity-linked currencies.