The euro shrugged off reports that a possible future Italian government would seek debt forgiveness from the European Central Bank while the dollar held firm near a five-month high on Wednesday helped by gains in long-term U.S. Treasury yields.
The euro was up 0.1 percent to $1.1853 after brushing $1.1815, its weakest since late December.
The dollar index versus a basket of six major peers stood at 93.240 after rallying to 93.457 overnight, its highest since Dec. 22. It was 0.03 percent lower than Tuesday.
The U.S. currency has gained since mid-April and clawed back most of its 2018 losses after a reassessment of the path of U.S. monetary policy versus other countries.
Moves by China and the United States to avoid a full-blown trade war have allowed investors to focus on the yield advantage the United States enjoys over other countries.
The dollar rally stalled last week after weaker-than-expected April U.S. inflation data but was lifted on Tuesday when strong U.S. consumer spending numbers sent 10-year Treasury yields surging to a seven-year peak of 3.095 percent.
The Swiss franc extended its gains against the euro on Wednesday and was up 0.2 percent to 1.1838 francs.
The Australian dollar was up 0.3 percent at $0.7491 after sliding 0.7 percent overnight.
The pound was a shade weaker at $1.3501 after slipping to $1.3452 on Tuesday, its lowest since Dec. 29.