The euro jumped against the dollar Monday, lifted by improved eurozone sentiment as Greece undertakes a debt buyback program, but erased part of its gains after poor US manufacturing data.
The euro bought $1.3051 at 2200 GMT, up from $1.2986 at the same time Friday.
Earlier, the shared European currency hit $1.3076, its highest level in almost six weeks.
The euro rose to 107.36 yen from 107.12 yen late Friday.
The dollar's weakness extended to the Japanese currency, where the greenback fetched 82.24 yen, down from 82.46 yen.
"Most of today's European news is favorable," said Nick Bennenbroek at Wells Fargo Bank, citing a formal Spanish request for aid to recapitalize Spanish banks and the launch of a debt buyback by the struggling Greek government.
The euro pared its gains after a bleak US manufacturing report from the Institute for Supply Management, which said its index on manufacturing activity shrank in November after two months of expansion.
"The main event has been the ISM, which was disappointing," said Alan Ruskin at Deutsche Bank.
Businesses the ISM surveyed blamed the slow global economy and uncertainty from the "fiscal cliff" battle in Washington, where politicians appeared to dig in their heels instead of attempting compromise on a budget-deficit plan that would avoid the year-end federal tax increases and spending cuts.
"The good news on the fiscal cliff is that it is an eminently fixable problem," said Nigel Gault at IHS Global Insight.
"The bad news is that there's no sign that it actually will be fixed until the eleventh hour -- or later."
The dollar fell against the Swiss currency, to 0.9255 francs from 0.9278 late Friday, while the pound rose to $1.6090 from $1.6009.