The 15-nation euro on Monday rose against the U.S. dollar, which has gained some strength as currency-market traders begin to look more critically at the European economy.
In afternoon trading in Europe the euro stood at US$1.5643, up from the US$1.5635 that it purchased late Friday in New York.
The British pound was up to US$1.9917 from US$1.9826 in New York, while the dollar slipped to purchase 104.31 Japanese yen from 105.26 on Friday.
The euro blasted to a new all-time high of US$1.6018 last week on continued concern about the U.S. economy.
But it has since been brought back down as traders have been looking at reports from Germany, Europe's largest economy, and the euro-zone in general, said Gary Thomson, the head of sales trading at CMC Markets.
"There has been a slight retracement, but disquiet is emerging over the bigger than expected drop in German Ifo (business climate survey) last week, and the state of the euro-zone economy as a whole is now being called into question," he said in a research note.
"Obviously next week's ECB (European Central Bank) rate meeting will be of critical importance whilst the Fed's equivalent this week also has the potential to provide some direction for the pair in the shorter term, but the market seems to have priced in the consensus quarter point cut here already."
Though lower interest rates can spur a nation's economy, they can weigh on its currency as traders transfer funds to countries where they can earn higher returns.
Traders were looking ahead later Monday to reports on consumer prices and consumer confidence in Germany for signals, Thomson said.
"Any sign that a pattern of slowdown is emerging here could be sufficient to push the euro lower still in the near term, but at the same time a degree of technical resistance is probably to be expected as those shorting the currency look to book profits too."
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