The euro struggled to pick up in Asia on Friday ahead of Greece`s last-minute funding talks with its European creditors, while the dollar was supported by expectations US interest rates will go up this year.
The single European currency was at USD 1.1363 and 135.15 yen in Tokyo trade, compared with USD 1.1365 and 135.18 yen in New York afternoon but well down from USD 1.1415 and 135.49 yen earlier Thursday in Asia.
The dollar edged down to 118.89 yen from 118.94 yen in US trade.
Eyes are on events in Brussels, where the finance ministers from the eurozone`s 19 members will consider Greece`s application for a loan extension without the painful austerity measures it says have hurt the economy.
Germany rejected the request for an extra six months of cash, fuelling fears Greece will run out soon after its current bailout finishes at the end of the month.
However, hopes of a breakthrough have increase after a Greek government source said German Chancellor Angela Merkel held talks with Greek Prime Minister Alexis Tsipras by telephone on Thursday in a "positive climate".
Also, German vice chancellor Sigmar Gabriel said that while Athens` offer fell short, "it must be used as a starting point for negotiations".
National Australia Bank said there was nothing definitive at this stage but pointed to the "rather legalistic construction" of the Greek request letter.
It "seems to express a wish to comply with its existing conditions or at least work toward a solution rather than blanket rejection of completely re-writing the conditions", the bank said in a note.
The dollar has recovered from losses that came after Federal Reserve minutes suggested an interest rate hike could be put back, as a bigger-than-forecast decrease in jobless claims reinforced belief that US economic growth is outpacing global peers.
"It`s a lay-up -- everybody wants to be here in the US," Michael Levas, founder and chief investment officer of Olympian Capital Management said in an interview in New York. "Everybody feels safety and security in owning US paper, whether it`s US government bonds or the dollar."
Neil Jones, head of hedge fund sales at Mizuho Bank in London, said "a rate increase by the Fed may not be immediate, but 2015 is still a possibility".
"Any dollar weakness may be temporary," he told Bloomberg News.
