The dollar was holding steady in a tight range against the euro today with analysts focusing on Thursday's euro zone rate-setting meeting.
The yen was broadly weaker on more unsettling news on the Japanese economy.
The latest bout of gloom on prospects for the euro kicked in on Friday with a survey showing German business confidence suffering its biggest drop for almost 28 years. That helped push the single currency to a five-week low of $0.8965.
With the European Central Bank due to meet on Thursday, analysts said there was a growing feeling monetary authorities must take decisive action or see the euro decline further.
"There's very much a short-term feeling here that if the ECB doesn't cut rates either this week or in two week's time by 50 basis points then the euro could weaken," one London-based dealer said.
The euro was almost unchanged against the dollar from the New York close at $0.8995.
The failure of the euro to firm against the dollar following the September 11th attacks and increasingly depressing economic data out of the US was beginning to raise questions about the currency's prospects in the longer term.