The US dollar rose against the euro Friday as concerns about the "fiscal cliff" crisis encouraged investors to move away from the common European currency.
At about 2200 GMT, the euro stood at $1.3181, down from $1.3241 late Thursday. It also lost against the Japanese yen, reaching 110.05 yen compared to 111.72 a day earlier.
The greenback dipped against the yen, edging lower to 84.25 yen from 84.38 late Thursday.
The markets are closely monitoring whether Washington can fend off the so-called fiscal cliff, a mix of tax increases and spending cuts set to take effect in January that could take the world's biggest economy back into recession.
"Failure to reach a deal would result in a massive fiscal shock to the economy that would all but certainly result in recession," Omer Esiner of Commonwealth Foreign Exchange wrote in an analysis.
"Ironically, the dollar stands to benefit from the resulting flight to safety if lawmakers fail to reach a deal."
Negotiations between President Barack Obama and top Republican John Boehner on averting the "fiscal cliff" have stalled with just days to go before an end-of-year deadline.
On Friday, Obama said he still believed a deal could be reached, asking lawmakers to draw up a scaled-back package to avert the year-end fiscal crisis.
In other currencies, the dollar climbed to 0.9164 Swiss francs, while the pound slipped to $1.6167.