The euro recovered ground against the U.S. dollar in thin trading Wednesday as European markets reopened after the Christmas holiday.
The 12-nation currency rose to US$1.3151 in morning European trading from US$1.3098 in New York the previous night _ canceling out its losses in Tuesday's U.S. session.
The British pound rose to US$1.9593 from US$1.9539. The dollar slipped to 118.69 yen from 119.16 yen, retreating from a two-month high against the Japanese currency.
The euro has been helped recently by expectations, fueled by U.S. data, that the gap between European and U.S. interest rates will continue to narrow.
"With little information of note scheduled for release in the coming hours and thinner than normal volumes likely to add to overall volatility, any conclusive direction may well prove difficult to establish in the near term," said Tim Wilbraham, a senior foreign exchange trader at CMC markets.
Higher interest rates, a weapon against inflation, support a currency by making assets denominated in that currency more attractive to investors.