On Wednesday, euro rose against the dollar, but is traded at seven-month low reached in the previous session as the divergent political forecasts in relation to Federal Reserve and the European Central Bank put pressure on the single currency.
EUR/USD rose 0.31% to 1.0673, retreating from Tuesday's low at 1.0629, its lowest level since April 16.
Demand for the dollar is still supported by expectations that the Fed will raise interest rates in December.
At the same time, the ECB, according to forecasts, will expand its quantitative easing program, and possibly will lower rates at its December meeting.
The euro remained under pressure amid fears that terrorist attacks in Paris could weaken an already fragile economic recovery in the region.
The US data released on Tuesday, showed that US inflation rose in October after two months of decline, underlining the view that economy is in a fairly safe situation to raise interest rates.
The US Commerce Department reported that the rate of inflation and consumer prices rose last month by 0.2%.
The dollar began to fall in price before the yield on US Treasuries fell amid increased demand for refugees, as the bomb threats in Germany triggered fears of a new attack, just days after the deadly terrorist attacks in Paris.
The euro strengthened against the yen and pound; EUR/JPY gained 0.18% to 131.6, and EUR/GBP pair rose 0.19% to 0.7007.
The USD index, which tracks the US currency against a basket of six major rivals, fell 0.17% to 99.55, being traded just below the peak of 99.84 on Tuesday, which is April 13 maximum.
Later today, investors await the publication of minutes of the Fed October meeting to find additional guidance on the likelihood of a rate hike in December.
Meanwhile, US data on housing starts and building permits should provide some clarity about the strength of the housing sector.