NEW YORK: The European single currency slipped back Friday as strong US growth data buoyed the dollar and investors reviewed a troubled week amid fears over debt-laden Portugal.
Dealers said the dollar got a boost after news the US economy grew 3.1 percent in fourth quarter 2010, up from a previous estimate of 2.8 percent, bolstering hopes that Middle East unrest, Japan's devastating earthquake and eurozone debt problems will not derail the recovery.
By 2300 GMT the euro fell to $1.4088 from $1.4168 in New York late Thursday. The dollar advanced to 81.34 yen from 80.99 yen on Thursday.
Comments by a senior US Federal Reserve official that the US central bank should return monetary policy to more normal settings -- interest rates have been held close to zero since 2008 -- reinforced faith in the dollar and the economy.
The Fed and other central banks slashed interest rates to help their economies recover from the global financial crisis and there have been increasing signs recently that they could soon tighten policy.
Higher interest rates usually support a currency as they make it a more attractive investment proposition.
The European currency was also weighed down by worries about eurozone debt.
A two-day European Union summit concluded Friday in Brussels with expressions of support for Portugal after parliament voted out the government in protest at its latest austerity package.
At the same time, EU leaders, most notably German Chancellor Angela Merkel, called on Portugal to abide by the targets already agreed with Brussels in order to stabilize its strained public finances.
"The EU summit concludes today but without the silver bullet which would resolve the eurozone debt and banking crisis in an orderly way," VTB Capital economist Neil MacKinnon said.
European leaders indicated Portugal would need a 75-billion-euro bailout, following on from last year's rescues for Greece and Ireland.
The dollar stood 0.9199 Swiss francs (0.9082).
The pound was at $1.6042 (1.6117).
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