The dollar eased against major currencies on Monday, hitting 10-day lows against the euro as investors grew nervous ahead of key U.S. data this week.
The possibility that U.S. interest rates will rise at a faster pace has spurred the dollar on this month, and markets will scrutinise minutes of the Federal Reserve's March policy meeting, due on Tuesday, for clues on the outlook for rates.
But the focus is returning to structural imbalances in the U.S. economy, with the trade gap data for February, also due on Tuesday, forecast to be the second largest on record.
"There is a bit of a waiting game for the trade data tomorrow, and the minutes will be critical as there is a lot more focus these days on what the Fed is saying," said Daragh Maher, senior currency strategist at Calyon.
The euro rose a quarter percent from the U.S. close through resistance at $1.2950 to $1.2974 by 0943 GMT, its highest level since April 1 and nearly two cents above 2-month lows set last week.
The dollar broke below 108 yen to 107.82 yen , down a quarter percent and more than one yen below five-month highs set last week.
The euro steadied at 139.84 yen after hitting a four-week high of 140.26 in Asia.
The euro zone government debt market faces a busy round of supply this week, with up to about 20 billion euros of expected offerings. Such supply is often a focus for Japanese investors.
Sterling and the Australian dollar also hit 10-day highs against the U.S. dollar, with sterling finding further support from stronger-than-expected British producer price data for March and a narrow-than-expected trade deficit for February.
Euro zone finance ministers meet in Luxembourg later on Monday, with European Central Bank President Jean-Claude Trichet due to attend.