The dollar's rally ran out of steam Friday as concerns about a possible heightened terrorism alert eclipsed the impact of stronger than expected US job creation figures.
The dollar dipped to ¥109.29 at 10pm, against ¥110.17 on Thursday.
The euro perked up to trade at US$1.1535, up from US$1.1415 in New York late on Thursday.
"It is a very rumor-driven market at the moment," said Hans Redeker, head of currency strategy at BNP Paribas.
Kathy Lien, chief fundamental analysts with Forex Capital Markets said the rumors proved enough to send the dollar lower, particularly against the euro, with a light US economic data calendar next week.
The speculation about an increased terror risk alert proved only to be market rumor, but concerns about US security are perpetuated by reports of casualties in Iraq.
Redeker noted that the dollar's failure to break past US$1.1370 against the euro and the relatively quiet pre-weekend trade also helped heap pressure on the US currency.
Robert Sinche at Citibank said the dollar's inability to break through the key support levels of before a Group of Seven statement on exchange rates sparked some consolidation, but said he still sees the dollar moving higher, particularly against the euro.
"The rebound in the dollar that we expect will eventually push the euro back below 1.10 during the months ahead gathered momentum this week," he said.
The dollar spiked higher briefly in the wake of a forecast-busting US labor market report that suggested the US economic recovery was well on track.
The US Labor Department reported that the economy had added more than a quarter million non-farm payroll jobs over the past three months.
But the gains proved fleeting.
The dollar shot up to a seven-week high of US$1.1376 against the euro after the news but gains were even then limited by profit-taking, said Gary Noone, analyst at MMS International.
The dollar was being quoted in late US trade at 1.3618 Swiss francs from Sf1.3765 Thursday.
The pound was at US$1.6741 dollars from US$1.6683.
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