The euro hit a three-week high against the dollar Friday, boosted by an encouraging German rebound in business confidence and rising hopes for a crucial aid payment to debt-wracked Greece.
The euro bought $1.2973 at 2200 GMT, compared with $1.2884 at the same time Thursday.
It climbed to 106.90 yen from 106.25 yen late Thursday, while the dollar edged down against the Japanese currency to 82.40 yen from 82.47 yen.
"The US dollar is lower on balance and the euro is higher, with investor sentiment supported by better-than-expected data and with a lack of progress by European policymakers doing little to unsettle markets for now," said Nick Bennenbroek at Wells Fargo Advisors.
In Germany, the IFO business confidence reading unexpectedly rose in November, ending a six-month slide in Europe's biggest economy.
European officials voiced confidence that a deal on Greece aid will be reached Monday, at the next emergency meeting of the Eurogroup of finance ministers from the 17 states that use the single currency.
"Events in Europe are likely to be the focus of the week as the Eurogroup meeting is expected to see negotiations on the Greek financing gap progress further," said Geoffrey Kendrick at Nomura Foreign Exchange.
The dollar fell to 0.9279 Swiss francs from 0.9349 francs late Thursday.
The greenback also was lower against the British pound, which fetched $1.6033, up from $1.5937 a day earlier.