The dollar slipped Thursday against most other major currencies after export data from China showed a continued rebound in global trade while job claims figures in the U.S. improved.
The dollar has risen to 4-year highs versus the euro this month, mostly because of fears about the impact of Europe's problems and a possible slowdown in China on the worldwide recovery.
The euro rose to $1.2050 in morning trading in New York, up from $1.1986 late Wednesday.
Worries about European debt, faltering growth prospects on the continent and the economic effects of deep cuts in government spending have weighed on the euro this year.
Analysts say Europe's fiscal problems are going to force the European Central Bank to keep interest rates at their current 1 percent for a long time, weighing on the euro. On Thursday, the ECB maintained that 1 percent rate. ECB President Jean-Claude Trichet also said the central bank's controversial bond purchase program was temporary. When the ECB buys the debt of troubled European governments, that could increase the money supply, sparking inflation and dragging down the euro.
In other early trading Thursday, the British pound rose to $1.4636 from $1.4533, and the dollar fell to 1.1413 Swiss francs from 1.1485 francs. But it edged up to 91.42 Japanese yen from 91.15 yen. Both the dollar and yen are viewed as safe bets amid economic turmoil.
The dollar also tumbled to 1.0310 Canadian dollars from 1.0445 Canadian dollars, and was sharply lower versus currencies in Latin America, Asia and European countries that do not use the euro.
Emerging-market currencies and currencies of countries that are big exporters of commodities got a boost from news that China's exports shot up almost 50 percent in May.
Economists have been worried that stagnating economies in Europe would dampen world trade and hurt the recovery from the recession. Traders bought up riskier currencies after the export data and gains in Australian employment showed resilience in the global economy's "bright spots," said UBS AG analyst Geoffrey Yu.
