The euro rose from a 16-month low on Tuesday, as a halt in the dollar's rally prompted some investors to buy the single currency.
But fears over Italian budget proposals and Britain's exit negotiations from the EU are likely to dampen any gains.
Tuesday is the deadline for Italy to return its budget proposals to the European Union after a confrontation between Rome and Brussels over government spending plans, which has caused turmoil in the bond markets and pushed the European currency.
Progress in negotiations for Britain's secession from the European Union is another source of uncertainty about the euro and the pound sterling.
British Prime Minister Teresa Mae said on Monday there were still significant issues ahead as the two sides drew closer to the finish line in Britain's exit negotiations.
Against the dollar, the euro rose 0.1 percent to $ 1.1229, beating the low of $ 1.1216 hit in June 2017.
The single currency has fallen about 7 percent since the beginning of this year, losing more than half of last year's gains.
The dollar rally halted last night, with the US currency index slightly lower to 97.628. The index hit 97.70 in the previous session, its highest since June 2017.
The Japanese Yen was trading at 113.99 today, with the greenback up 0.1% against the Japanese currency, and the yen hit a three-week low of 114.20 yen on Monday.
