The euro was off day highs in late trade Friday, falling off its record perch above US$1.20 amid a bout of profit taking, dealers said.
The euro earlier rose past the key psychological barrier of US$1.20, setting a post-launch high of US$1.2018 as concerns about the large US current account deficit plagued the greenback. The single European currency's previous all-time peak of US$1.1979 was set on Nov. 19.
Meanwhile the pound set a series of five-year highs.
In late trade, the euro stood at US$1.1995, up from US$1.1908 late on Thursday.
The dollar was at ?109.50, up from ?109.08 Thursday.
"Dollar sentiment has been very weak indeed but it was always very unlikely that the euro was going to make a clean break for US$1.20," said Jane Foley, analyst at Barclays Capital.
Analysts said continued worries over the US current account deficit had been besetting the dollar.
These concerns were high-lighted by last week's news that portfolio inflows had all but dried up in September, suggesting the US current account deficit was not being financed.
The very same worries have also meant that strong US data has been ignored for some time now, analysts said.
But with much of the US extending Thursday's Thanksgiving holiday into the weekend, sparse activity levels have exaggerated movements, dealers said.
The dollar looks set for further declines, analysts said.
"The US authorities are not unhappy about the dollar's decline and will maintain this position until either the trade position has stabilised, or the dollar's weakness starts to undermine the Treasury market," Bear Sterns analysts said.
The pound and the Swiss franc were also off highs against the dollar but still substantially higher than Thursday.
The yen alone could not make much progress against the dollar after the morning's soft Japanese industrial production and unemployment data.
"Along with renewed apprehension over the health of the Japanese banking system -- following news of the apparent insolvency of Ashikaga Financial Group -- the data allowed for a modest upward drift in dollar-yen," Bank of New York analysts said.
The euro was changing hands at US$1.1995 from US$1.1908 late on Thursday in New York, ?131.29 (?129.90), ?0.6969 (?0.6948) and 1.5485 Swiss francs (Sf1.5486).
The dollar stood at ?109.50 (?109.08) and 1.2919 Swiss francs (Sf1.3005).
The pound was at US$1.7207 (US$1.7139), ?188.39 (?186.94) and 2.2217 Swiss francs (Sf2.2291).
On the London Bullion Market, the price of an ounce of gold was fixed at US$398.35 against US$395.25 on Thursday afternoon.