The dollar clawed back ground against the euro today, steering away from record lows set in the previous session and taking a breather from its recent nail-biting decline.
The dollar also kept its balance against the yen, holding above the key 106 yen mark amid wariness of a repeat of the previous day's suspected yen-selling intervention by Japanese authorities.
Sentiment towards the dollar remains bleak, analysts said, due to persistent worries about the United States' ability to attract investment flows to cover its current account deficit.
But after ratcheting up gains of more than two cents in two days, the euro may have run out of steam for now, they added.
The dollar hit record lows beyond $1.2810 per euro yesterday and also plumbed three-year lows just above 106 yen, before rebounding on talk of intervention.
The debate over ballooning EU budget deficits also continued, with EU Commission legal advisers saying today that EU finance ministers acted illegally when they suspended the bloc's budget rules last year to spare France and Germany disciplinary action over their excessive deficits.
