The euro gained in Asian trade on Wednesday as concerns over emergency aid to debt-ridden Greece eased, while jitters about the so-called US fiscal cliff hung over the greenback.
The euro, which fell briefly to a two-month low of $1.2662 on Tuesday, edged up to $1.2719 in Tokyo trade against $1.2703 in New York late Tuesday.
It also firmed to 101.11 yen from 100.85 yen in US trade, while the dollar firmed to 79.50 yen from 79.38 yen.
The euro was aided by reports, which German Finance Minister Wolfgang Schaeuble appeared to support, that Greece could be handed delayed loans in one go, National Australia Bank (NAB) said.
Eurozone ministers failed Monday to clear the aid payment for Athens, worth 31 billion euros, which has been held up for months, deciding instead to hold another meeting on the issue next Tuesday.
The Wall Street Journal said Greece's international lenders were considering grouping together several delayed loans into one payout of about 44 billion euros.
Any decision to bundle the disbursement of funds depends on details still being worked out with Athens, the paper quoted German government officials as saying.
Schaeuble said in Brussels it was "logical" to combine payments to Greece that were due at the end of the past two quarters with one at year end, should issues with the bailout programme be resolved.
"Positive news on Greece is likely to transcend negative incoming economic news in terms of euro impact," NAB said in a note.
But the bank added "concerns that Spain will continue to resist requesting assistance unless or until the bond market forces it next year, is waiting in the wings as the next bogeyman that could block a euro revival".
Traders were also eyeing eurozone industrial production due later Wednesday and the preliminary estimate of July-September gross domestic product on Thursday.
The dollar was mostly lower against other Asia-Pacific currencies.
It edged down to 9,637 Indonesian rupiah from 9,650 rupiah, to 30.68 Thai baht from 30.69 baht, and to 1,086.35 South Korean won from 1,090.73, while it was flat at 54.97 Indian rupees and Tw$29.04.
The greenback also fell to Sg$1.2219 from Sg$1.2237 and to 41.10 Philippine pesos from 41.12 pesos.
The Australian dollar rose to $1.0450 from $1.0401, and China's yuan gained to 12.74 from 12.69 yen.