The single European currency bought 1.2668 dollars at 2100 GMT, from 1.2699 late Thursday in New York.

The dollar was trading at 118.03 yen from 117.79, on a day that Wall Street's Dow Jones share index fell just short of its record closing high of 11,722.98 reached in January 2000, closing at 11,679.07.

Friday's data showed that US consumer spending rose 0.1 percent in August from July while households' income went up a faster 0.3 percent. Analysts said this was in line with a picture of slowing economic growth.

A separate report showed the University of Michigan consumer sentiment index rising to a better-than-expected 85.4 points.

And data from Chicago-region purchasing managers showed the area's industrial index at a surprisingly strong 62.1 points.

"The market had been nervous after the Philly Fed (survey) had signalled a slowdown in manufacturing," said Steve Barrow, currency strategist at Bear Stearns.

Analysts said the results overall were consistent with the view that the Federal Reserve will keep borrowing costs on hold for now to leave its benchmark interest rate at 5.25 percent.

Traders said the dollar was helped by some fund buying, particularly in Asia, as the third quarter closed.

Other currencies have had problems of their own, not least the Japanese yen, which is suffering from the portfolio changes.

The euro encountered headwinds after inflation in the 12-nation single currency zone dropped to an annual rate of 1.8 percent from 2.3 percent in August.

Though eurozone inflation fell sharply in September, coming into line with the European Central Bank's target for the first time since January 2005, analysts said the ECB was still on course to raise rates.

They expected the bank to lift its key refi rate another quarter point to 3.25 percent next Thursday, especially after a surprising rise in economic sentiment in the eurozone.