The dollar started the week pinned near two-week lows on Monday as traders questioned whether the recovery from the pandemic in the United States would be as fast as expected.
Bitcoin remained volatile, retreating to as low as $45,914.75 a day after reaching a record $49,714.66.
The world’s most popular cryptocurrency had rallied 25% last week, driven by endorsements from Tesla and BNY Mellon.
The dollar index slipped 0.1% to 90.336, close to last week’s low of 90.249 - a level unseen since Jan. 27.
The gauge hit a two-month top of 91.6 on Feb. 5 on hopes that a U.S. rebound would outpace other major economies, but has since pulled back amid disappointing employment data.
“Now the market is looking for actual evidence that the U.S. economy is outperforming,” said Shinichiro Kadota, senior currency strategist at Barclays Capital in Tokyo.
“The economic data needs to improve.”
The euro edged 0.1% higher to $1.21315, extending last week’s 0.6% advance.
The dollar rose 0.1% to 105.04 yen, recovering some of the previous week’s 0.4% loss.
Many financial markets in Asia remained closed on Monday for Lunar New Year, with the United States also out for Presidents Day.
Riskier currencies gained against the greenback, with the Australian dollar adding 0.3% to 77.795 U.S. cents after earlier touching a one-month high of 77.85.
The British pound appreciated 0.3% to $1.3895 after renewing an almost-three-year high at $1.3901.
The Chinese yuan reached its strongest level since June 2018 at 6.4012 per dollar in the offshore market.
In cryptocurrencies, bitcoin last traded 3.7% lower at $46,852.
Rival virtual coin ethereum, which often trades in tandem with bitcoin, slumped 4.3% to $1,725. It reached a record high of $1,874.98 on Saturday.
Reporting by Kevin Buckland; Editing by Himani Sarkar