The euro fell to 1.2663 dollars in New York at 2100 GMT from 1.2751 dollars late Friday.
The US currency fell against the Japanese currency, fetching 84.55 yen compared to 85.19.
“There is a little bit of caution at the beginning of the new week, that is helping the dollar and that is helping the yen,” said Wells Fargo analyst Nick Bennenbroek.
The yen’s rise defied an announcement by the Bank of Japan that it would extend a multi-billion-dollar loan programme.
The decision came after an emergency meeting called in response to strong pressure from officials to curb the yen’s rise and support an economy mired in deflation. The unit hit a 15-year high against the dollar last week.
The rising yen is seen as a threat to growth, raising prices on Japanese exports and reducing the competitiveness of Japanese industry.
Meanwhile in the United States, data showing consumer spending rose to a disappointing 0.4 percent and incomes rose 0.2 percent last month underscored fears that the US economy was .
Consumer spending is a key driver of US economic growth, usually accounting for two-thirds of output.
“The majority of the decline was simply because of this morning’s numbers. We got some very disappointing income numbers, and figures showing spending is outpacing income,” FTN Financial analyst Lindsey Piegza told AFP.
All eyes will turn to the release of the monthly employment data on Friday, with most analysts forecasting non-farm payrolls to fall by 118,000 in August and unemployment to edge up to 9.6 percent from the current 9.5 percent rate.
On Wednesday, the Institute for Supply Management index is expected to show slower manufacturing output.
Against other key currencies, the dollar fell to 1.0254 Swiss francs from 1.0278 on Friday while the British pound was down to 1.5460 dollars from 1.5517.
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