New York: The dollar weakened against other major currencies on Friday amid rising concerns that the US budget impasse could shut down the federal government in four days.
The euro bought $1.3519 around 2100GMT, up from $1.3485 late on Thursday.
The dollar fell to 98.24 yen from 99.00 yen, while the euro also dropped against the Japanese currency, to 132.88 yen from 133.51 yen.
Forex, equities and oil markets retreated in the face of a possible US government shutdown if Congress fails to pass a budget bill for the 2014 fiscal year, which begins on Tuesday.
Republicans oppose backing an operating plan for the government unless President Barack Obama agrees to delay or defund his signature health-care reform law, a step the president has flatly refused to take.
"As this deadline approaches investors are stepping up their sale of dollars on the growing concern that a government shutdown will undermine the quality of US assets and lead to a retrenchment in US growth," said Kathy Lien of BK Asset Management.
"We are still hoping for an 11th hour deal but the prospects are growing dimmer by the hour as Congress holds the US economy and the US dollar hostage," she said.
David Rodriguez of DailyFX said that low forex market volatility and relative indecision suggested that traders would wait until next on Friday's US September jobs report to force the next big dollar move.
"In the meantime we expect the US currency to hold its recent range versus the euro and Japanese yen," Rodriguez said.
The euro and the pound were among the notable gainers.
"The euro gained on generally firm economic data, while the pound was boosted by comments from the Bank of England governor, who said he did not see a case for further quantitative easing," said Nick Bennenbroek of Wells Fargo Securities.
The pound rose to $1.6137 from $1.6039 late on Thursday.
The dollar fell to 0.9052 Swiss franc from 0.9102 franc.