The euro and yen recovered on Wednesday after a week of declines that had pushed the dollar to its highest levels in more than a month and revived expectations of a longer rally in the US currency.
US economic data had shown some signs of improvement in recent days. Comments from Federal Reserve officials also strengthened expectations that the central bank might consider raising interest rates in the second half of the year.
Against these dollar-supportive signals, first-quarter figures had disappointed, while other indicators showed several major economies struggling.
The dollar fell 0.1 percent against the Japanese currency to 123.035 yen, after rising to 123.33 yen, its highest level since mid-2007.
The euro recovered by more than 0.3 percent to $1.0911 after falling to a one-month low of $1.0864 in Asian trading.
Together, these moves pulled the dollar index, which measures the US currency against a basket of major currencies, down about 0.3 percent to 97.035.
The Australian dollar steadied after reaching a one-month low of US$0.7726 in Asian trading. The New Zealand dollar recovered slightly to US$0.7740 after falling to its lowest level in more than two months at US$0.7222.
Sterling retreated from its recent two-and-a-half-month high against the euro as investors awaited the Queen’s Speech outlining the government’s plans for a referendum on Britain’s membership of the European Union.
The euro rose 0.2 percent against sterling to 70.82 pence, recovering from 70.645 pence, its lowest level since March 12. Sterling gained 0.2 percent against the dollar to $1.5420.