The euro was slightly lower against the dollar on Tuesday ahead of a new round of U.S. economic data and a Federal Reserve meeting on interest rates.
The 13-nation euro bought US$1.3443 in morning European trading, down from US$1.3466 in New York late Monday. The British pound, which on Monday briefly broke through US$2, slipped to US$1.9971 from US$1.9985.
The dollar declined to 123.18 yen from 123.62 yen after Japanese Finance Minister Koji Omi said he was "watching foreign exchange rate moves very closely" - a remark viewed as a sign that Japan is worried about a further decline in the yen.
Economic data from the U.S. this week - including the Conference Board's monthly Consumer Confidence Index on Tuesday, and the Commerce Department's May durable goods orders report on Wednesday - could help give more direction to the dollar.
U.S. economic data are being watched closely for hints on the Federal Reserve's future interest rate course. The Fed is scheduled to meet this Wednesday and Thursday to discuss interest rates.
"Any suggestion that the Fed will now look to drop its rates before the year end ... would weigh on the dollar, probably in a somewhat lasting manner," said David Jones, chief market analyst at CMC Markets.
Speculation about a possible Fed rate cut has coincided with expectations that the European Central Bank and the Bank of England will continue to raise their rates.
Higher interest rates, a weapon against inflation, can strengthen a currency by making investments denominated in it more attractive.
Russian President Vladimir Putin and German Chancellor Angela Merkel had had a few fights and used strong language because of the Ukrainian crisis in 2014