TOKYO: The euro on Friday slipped from two-year highs against the dollar as slowing eurozone business activity weighed on the unit, while the dollar held steady against the yen.
The European single currency fetched $1.3793 in Tokyo midday trade against $1.3798 in New York Thursday afternoon, where it hit $1.3827 at one stage, its highest level since November 2011.
Against the Japanese currency, the dollar fetched 97.28 yen, nearly flat from 97.29 yen, while the euro slipped to 134.21 yen from 134.37 yen in US trading.
Dealers said the dollar won a measure of support from buying by Japanese importers.
The euro and yen have benefited in recent weeks as a two-week US government shutdown and weak economic data heightened speculation the Federal Reserve would delay a pullback on its monetary easing -- a negative for the dollar.
"The falling US dollar is related to the now widespread belief that the Fed will delay to at least February (its monetary easing tapering), compounded by the weakness in some of the recent data," said National Australia Bank.
Euro sentiment won support earlier this week from rising consumer confidence figures and after Spain's central bank said the country had inched out of its two-year recession with timid growth in the third quarter -- fuelling fragile hopes of a broader eurozone recovery.
However, the unit pared its gains after the closely-watched Markit Economics' purchasing manager's index on Thursday showed eurozone business activity slowed in October, coming off a 27-month high in September.
Investors were also keeping a close eye on China after data Thursday showed that the country's manufacturing activity hit a seven-month high in October.
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