The dollar slipped against the euro Tuesday after German investor sentiment rose last and following strong demand at an auction for Spanish government debt.
Traders also bought Canadian dollars after the Bank of Canada made hawkish comments.
German investor sentiment unexpectedly rose in April for the fifth straight month. And Spain was able to sell more than $4.2 billion in debt Tuesday. Demand was strong, even though Spain's borrowing costs have risen in the past few weeks on concerns that the country may need a bailout.
The euro rose to $1.3139 in late trading Tuesday from $1.3134 late Monday.
The Bank of Canada said Tuesday that it may need to start raising its interest rates soon. Lower interest rates tend to weigh on a currency by reducing the returns investors get from holding it. With the possibility of an interest rate increase in the future, traders bought the Canadian currency Tuesday.
The dollar fell to 98.84 Canadian cents from 99.96 Canadian cents late Monday. Earlier, the dollar fell to a nearly one-month low of 98.63 Canadian cents.
In other trading, the British pound rose to $1.5947 from $1.5905. The dollar fell to 0.9144 Swiss franc to 0.9150 Swiss franc.
The dollar rose to 80.80 Japanese yen from 80.49 yen.