The dollar was slightly lower against the yen and the euro in early trade as the rally of the last few days began to run out of steam, analysts said.
The dollar rose sharply at the end of last week, with the euro sliding from an all-time high of $1.2925 on Wednesday to around the $1.24 level.
The dollar also surged against the Japanese unit, rising to above Yen 109. At 9.55 a.m. the euro was trading at $1.2544 against the dollar and £0.6754 sterling.
Some analysts believe last week's dollar rally will prove short lived as the market focuses once again on economic fundamentals, most notably the twin US deficits.
They warned this week's data releases are unlikely to provide the dollar with any renewed support, while Federal Reserve officials, a number of whom are due to speak this week, are unlikely to provide the unit with much support either.
Important releases such as the Conference Board's consumer confidence index for February and the first revision to Q4 2003 GDP data are expected to be disappointing.