The euro firmed against the US dollar on Friday as traders took profit at the end of a week riven with worries over US economic rescue efforts and the crisis in Central and Eastern Europe.
The euro traded at 1.2824 dollars at 2200 GMT, compared with 1.2673 dollars late Thursday.
But the single European currency weakened against the Japanese yen, falling to 119.63 yen against 119.35 yen.
The dollar also fell against the yen, to 93.29 yen from 94.18 yen.
"The euro jumped during the US trading session as European Central Bank Governing Council member Ewald Nowotny said that cutting interest rates down to zero was 'neither desirable nor needed,' suggesting that the ECB's dovish bias may be fading quickly," said Terri Belkas, an analyst at Forex Capital Markets.
Belkas noted the markets were still expecting the ECB to slash a half percentage basis point from its key interest rate on March 5, citing signals from various other ECB members in recent weeks.
The euro earlier had slid against the dollar because of mounting economic troubles in the recession-hit eurozone on a day that saw European stock markets plunge, with London's FTSE 100 index losing 3.22 percent.
Investors were also nervous about rescue plans in Germany, which on Friday adopted its biggest economic stimulus since World War II, and new data showing business activity in the eurozone hitting a record low in February.
The eurozone's purchasing managers' index (PMI), compiled by data and research group Markit, plunged to 36.2 points from 38.3 points in January, with output, new orders, employment and prices all down.
"February's sharp drop in the eurozone PMI indices suggests that it is too soon to judge that the region is over the worst of the economic downturn," said Capital Economics analyst Ben May.
Investors also sold the euro after German Chancellor Angela Merkel declined to comment on whether Berlin would offer help for any eurozone country in financial trouble, dealers said.
Her comments doused earlier speculation that Germany might signal it was ready to bail out any fellow eurozone member in dire straits.
"Merkel's comments prompted investors to sell the euro. Things are going from bad to worse" in Europe, said Daisuke Uno, an analyst at Japan's Sumitomo Mitsui Banking Corp.
"The eurozone has seen lots of trouble this week," he added.
Investors are worried about the debt mountains of countries such as Ireland, Greece and Portugal, as well as the exposure of eurozone banks to the economic woes of Central and Eastern Europe.
In late New York trading, the dollar fell to 1.1563 Swiss francs from 1.1735 late Thursday.
The pound was at 1.4421 dollars against 1.4293.
The euro traded at 1.2824 dollars at 2200 GMT, compared with 1.2673 dollars late Thursday.
But the single European currency weakened against the Japanese yen, falling to 119.63 yen against 119.35 yen.
The dollar also fell against the yen, to 93.29 yen from 94.18 yen.
"The euro jumped during the US trading session as European Central Bank Governing Council member Ewald Nowotny said that cutting interest rates down to zero was 'neither desirable nor needed,' suggesting that the ECB's dovish bias may be fading quickly," said Terri Belkas, an analyst at Forex Capital Markets.
Belkas noted the markets were still expecting the ECB to slash a half percentage basis point from its key interest rate on March 5, citing signals from various other ECB members in recent weeks.
The euro earlier had slid against the dollar because of mounting economic troubles in the recession-hit eurozone on a day that saw European stock markets plunge, with London's FTSE 100 index losing 3.22 percent.
Investors were also nervous about rescue plans in Germany, which on Friday adopted its biggest economic stimulus since World War II, and new data showing business activity in the eurozone hitting a record low in February.
The eurozone's purchasing managers' index (PMI), compiled by data and research group Markit, plunged to 36.2 points from 38.3 points in January, with output, new orders, employment and prices all down.
"February's sharp drop in the eurozone PMI indices suggests that it is too soon to judge that the region is over the worst of the economic downturn," said Capital Economics analyst Ben May.
Investors also sold the euro after German Chancellor Angela Merkel declined to comment on whether Berlin would offer help for any eurozone country in financial trouble, dealers said.
Her comments doused earlier speculation that Germany might signal it was ready to bail out any fellow eurozone member in dire straits.
"Merkel's comments prompted investors to sell the euro. Things are going from bad to worse" in Europe, said Daisuke Uno, an analyst at Japan's Sumitomo Mitsui Banking Corp.
"The eurozone has seen lots of trouble this week," he added.
Investors are worried about the debt mountains of countries such as Ireland, Greece and Portugal, as well as the exposure of eurozone banks to the economic woes of Central and Eastern Europe.
In late New York trading, the dollar fell to 1.1563 Swiss francs from 1.1735 late Thursday.
The pound was at 1.4421 dollars against 1.4293.
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