Upbeat U.S. regional factory and jobless claims reports erased the dollar's losses against most major currencies on Thursday, though Federal Reserve Chair Janet Yellen's dovish speech delivered on Wednesday still weighed on the currency.
In U.S. trading on Thursday, EUR/USD was up 0.01% at 1.3818.
The dollar narrowed earlier losses stemming from Federal Reserve Chair Janet Yellen's dovish speech on Wednesday and rose on cheery U.S. data.
The Federal Reserve Bank of Philadelphia reported earlier that its manufacturing index rose to 16.6 in April, the highest level since September, from 9.0 in March. Analysts had expected the index to tick up to 10.
Separately, the Labor Department reported that the number of individuals filing for initial jobless benefits in the week ending April 12 rose by 2,000 to 304,000, better than analysts' forecasts for a rise to 315,000.
On Wednesday, Fed Chair Janet Yellen said that monetary policy will need to remain accommodative for some time, citing slackness in the labor market and low inflation, which weakened the dollar, though Thursday's data gave the greenback some support.
Meanwhile in Europe, Germany's producer price index contracted 0.3% in March from a month earlier and fell 0.9% on year.
Analysts were expecting a 0.1% monthly increase and a 0.7% on-year decline.
The numbers chipped away at the euro's gains over the dollar, as a day earlier, data revealed that the annual inflation rate slowed to 0.5% in March from 0.7% the previous month, soft but in line with expectations.
Core inflation, which strips out volatile items like food and energy costs, fell to 0.7% from 1.0% in February, missing expectations for a 0.8% reading.
Euro zone inflation has now been in the European Central Bank's danger zone of below 1% for six straight months, fueling speculation that policymakers will need to implement fresh stimulus measures to shore up the fragile recovery in the euro area.
The dollar was up against the yen, with USD/JPY up 0.20% at 102.44, and up against the Swiss franc, with USD/CHF up 0.12% at 0.8828.
The yen continued to come under pressure after Japanese Central Bank Governor Haruhiko Kuroda told parliament this week that now is not an appropriate time to discuss exiting stimulus policies.
The greenback was flat against the pound, with GBP/USD down 0.01% at 1.6796.
The dollar was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.02% at 1.1015, AUD/USD down 0.48% at 0.9325 and NZD/USD down 0.68% at 0.8566.
The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.01% at 79.92.