The dollar slipped against most major currencies today, reversing some recent strong gains ahead of an expected US interest rate cut by the Federal Reserve this week.
Markets are fully pricing in a 25 basis point easing from 4.50 percent from the Fed when it meets tomorrow, but chances of a bigger move have fallen to one-in-five from around 50-50 a week ago.
In early New York trading, the euro was up 0.4 per cent at $1.4717. It got a boost last week as comments by ECB President Jean-Claude Trichet left open the possibility of higher rates next year, and added to those gains on Friday despite a fairly solid US payrolls number.
The dollar fell 0.3 per cent against the Swiss franc to 1.1250 francs, while sterling rose 0.7 per cent to $2.0452.
Against the yen, the dollar was flat at 111.69. Earlier it hit a one-month high around 111.88 yen, according to Reuters data, but came back down after a $10 billion subprime writedown by Swiss Bank UBS fanned concerns about the health of the global financial sector.
Nonetheless, the dollar remained on a relatively firm footing - about four yen above last month's 2-1/2 year lows of 107.20 - after stronger-than-expected US jobs data on Friday dampened expectations of a 50 basis point US rate cut.
The euro was up around half a percent at 164.39 yen.
US pending home sales for October are scheduled for release at 10am, arguably the last piece of potentially market-moving data ahead of the Fed decision.
"Concerns about the outlook for US consumption ... may gain momentum today as pending home sales are expected to illustrate the dire state of the US housing market," Commerzbank Corporates & Markets said in a research note.