The euro has come off its highs of the morning in the wake of a weaker than expected purchasing manager survey on service-sector activity in the euro area.
"They're quite dismal figures. It's purely on the back of that (that the euro has come off)," said a senior foreign exchange analyst at ECU Group.
The euro earlier broke above $1.10 for the first time since March 1999, as the dollar's slide continued unabated in opening trading in London.
The dollar was hit as war with Iraq appears drawing closer, and the US Treasury Secretary expressed comfort with the dollar's decline, analysts said.
But the euro zone purchasing managers' index for services fell to 48.9 in February from a downwardly revised 50.0 in January, leading the euro lower.
A reading below 50 indicates a contraction in activity.
"This was confirmation that the euro doesn't really deserve to be above $1.10," de Klerk said.
Analysts said remarks from US Treasury Secretary Mr John Snow should continue to weigh on dollar sentiment, however.
AFP