its grip on three-week highs hit last week as the market readied for key German data expected to show the euro zone's economy improving but still lagging the U.S.
The dollar was firm across the board, helped by an upbeat tone in equity markets after a strong close on Wall Street on Friday.
However its gains were limited ahead of a week of key U.S. data, with the market keen to see whether expectations of recovery have outpaced reality.
"There's going to be a heavy U.S. and European data calendar and investors will get further confirmation of whether the U.S. economy continues to lead the global economy out of its growth slump," said Paul Robson, economist at Bank One.
"The German Ifo survey today should confirm that while picking up on the month the euroland economy continues to lag behind the U.S. economy."
By 0742 GMT the euro was holding a third of a percent lower on the day at $1.1466 , almost a cent off Friday's three-week peak and 4.5 cents below its record peak set in May and June.
The dollar was a third of a percent up at 119.08 yen and had gained a third of a percent on the Swiss franc to 1.3474 francs.
U.S. stock futures were pointing to a moderately firmer start on Monday after leading U.S. indices ended around 1.7 percent higher on Friday.
"(The euro) is off its highs and you do see that equity markets are higher -- U.S. equity markets as well as European equity markets. When you have equity markets globally higher, then you know that equity-related cross currency flows are increasing in size," said Hans-Guenter Redeker, chief currency strategist at BNP Paribas in London.
The euro has benefited this year from a government bond market rally but has come off its peaks as investors have unwound low-risk bond market trades in favour of equity market bets on global recovery.
IFO FIRST
The Ifo survey of German business sentiment is due at 0800 GMT, with the business sentiment indicator seen rising to 89.7 in June from 88.8 the previous month, according to a poll of 27 analysts.
This would be its third monthly rise in a row, which is what Ifo says is needed before the real economy can be expected to follow suit.
In contrast, data on Friday showed U.S. new orders for costly manufactured goods rose at their fastest rate in five months, while sales of new homes hit a record pace in June.
Bulls think a series of U.S. economic indicators due this week, starting with consumer confidence figures on Tuesday, will finally show a clearer sign of a U.S. recovery.
The U.S. data includes second-quarter gross domestic product, the Institute for Supply Management's (ISM) manufacturing index and employment figures for July.
"I think this week's U.S. indicators will be fairly good. They may be what the dollar needs to rise further," said Kota Kimura, assistant forex manager at Shinkin Central Bank.
"But if the dollar cannot rise on them, that would be a serious concern," Kimura said. The yen gave some ground to the greenback, aided by Japanese commercial buying, but traders said it was essentially fluctuating in a well-worn range between 118.40 and 119.40. Heavy offers from Japanese exporters were said to be lined up between 119.00 and 119.30 yen, which would block the dollar's advance in the near term, they said.
Currency bid prices at 0748 GMT. All data taken from with percent change calculated from the daily U.S. close at 2130 GMT.