The dollar rose against its main rivals on Friday ahead of a Group of Eight finance ministers meeting, with the market waiting to see if the thorny issue of US currency reserves will feature.
In late morning London trade, the European single currency fell to 1.4050 dollars, down from 1.4106 dollars in New York late on Thursday.
Against the Japanese currency, the dollar climbed to 98.08 yen from 97.60 yen on Thursday.
Finance ministers from G8 countries Britain, Canada, France, Germany, Italy, Japan, Russia and the United States will meet in Italy on Friday.
While few concrete results are expected, the meeting could see sparring over the safety of US investments and calls for European banks to undergo "stress tests" similar to those seen in the United States, said SMBC chief strategist Daisuke Uno.
It comes after Moscow said it would shift part of its reserves from US Treasuries into International Monetary Fund bonds and commercial bank deposits as questions linger over the greenback's future as the global reserve currency.
Japan and Russia are some of the largest holders of US debt.
"If something happens to set off speculation that Treasury bonds will be sold off by some countries, that could have some impact on currency markets," said Mitsubishi UFJ Trust and Banking forex manager Hideaki Inoue.
"I doubt such things would ever happen, but Russia is part of the G8, so we have to be careful," he told Dow Jones Newswires.
The greenback was likely to remain pressured as hopes for a global economic recovery sap demand for the safe-haven currency, said Hachijuni Bank forex strategist Masatsugu Miyata.
The dollar was seen as a reliable bet during the global crisis but has been hit recently as signs of a recovery have led funds to flow to higher-yielding commodity currencies such as the Canadian, Australian and New Zealand dollars.
Those countries are heavily dependent on raw material exports.
"Sentiment toward a world economic recovery is on the uptick," said Miyata.
In London trading on Friday, the euro was changing hands at 1.4050 dollars against 1.4106 dollars late on Thursday, at 137.89 yen (137.72), 0.8526 pounds (0.8504) and 1.5106 Swiss francs (1.5098).
The dollar stood at 98.08 yen (97.60) and 1.0746 Swiss francs (1.0701).
The pound was at 1.6488 dollars (1.6588).
On the London Bullion Market, the price of gold fell to 950.05 dollars an ounce from 956.70 dollars an ounce late on Thursday.