The dollar gained more ground Wednesday against the euro ahead of scheduled testimony from the U.S. Federal Reserve chairman.
The 12-country euro bought US$1.3105 in morning European trading, its lowest level for more than a week and down from US$1.3183 in New York late Tuesday. It also gained against the Japanese yen, rising to 105 yen from 104.29 Tuesday.
The British pound slipped to US$1.9088 from US$1.9169.
Traders expected Federal Reserve Chairman Alan Greenspan would support the dollar in testimony to the U.S. Congress later Wednesday. Greenspan was widely expected to repeat his optimistic views on the American economy and say that interest rates can be raised at a "measured" pace.
The dollar gained Tuesday amid mixed U.S. economic news. The U.S. government reported that construction spending rose strongly in January, but a private research group reported that the U.S. manufacturing sector grew at a slower pace in February than in the previous month.
The euro soared from about US$1.20 in September to an all-time high of US$1.3667 at the end of December, powered by concerns over the U.S. budget and trade deficits.
The dollar has since regained some ground, but those worries remain and analysts think the recovery could be temporary.