"The euro is caught between the global positives and the local negatives," said Vassili Serebriakov of Wells Fargo Bank. The "positives" include rising inflation which is pushing toward the target zone at which the European Central Bank needs to take action.

"The latter include another downgrade to Portugal's credit rating by S&P and softer European economic confidence data," he said, all of which favours keeping eurozone rates at current lows. The greenback meanwhile moved higher against the yen as some in the market saw chances that the US Federal Reserve could move early as well on rates, traders said. Fed members hinted recently that it might reel in its quantitative easing stimulus program with the economy growing and inflation picking up pace.

"Basically it's a reflection of the sequencing of the G7 (Group of Seven) central banks' rate hikes," said Philip Wee, senior currency economist for DBS Group Research in Singapore.

"Right now the ECB is the one that is ahead, and then the Fed, (where) I think there's a debate going on," he told AFP.

"In terms of the advanced economies, Japan is basically way behind in terms of the hikes."

"The euro's near-term fortunes are likely tied to this Friday's US payrolls data," Serebriakov. A strong reading on new jobs and lower unemployment could spark more interest in the dollar, he said. The dollar dropped to 0.9179 Swiss francs from 0.9201, while the pound edged up to $1.6080 (1.6007).