In U.S. trading on Tuesday, EUR/USD was up 0.06% at 1.3533.
The U.S. Congress on Monday failed to agree on a spending package due to disagreements over President Barack Obama's healthcare reform law, which prompted a partial government shutdown that began Tuesday, though many began to view the impasse as short-lived by afternoon trading.
The dollar softened in recent sessions on expectations of a shutdown and by Tuesday, many felt the event had already been priced into trading.
Many investors also shrugged off the closure on sentiments that similar impasses over the last two years have come and gone with politicians eventually finding a way out before the economy suffers lasting damage.
The dollar did weaken as market talk continued to persist that the Federal Reserve will keep its monthly USD85 billion bond-buying program in place to offset any damage the shutdown may inflict on recovery, though it failed to send investors fleeing the greenback in panic.
Fed asset purchases weaken the dollar by driving down interest rates to spur recovery, though solid economic indicators solidified expectations that Fed stimulus measures will begin taper soon, likely this year, which gave the dollar some support.
The Institute for Supply Management reported earlier that its manufacturing purchasing managers' index rose to 56.2 in September from 55.7 in August.
Analysts had expected the index to decline to 55.0.
On Monday, the Federal Reserve Bank of Dallas reported that its general business activity index increased to 12.8 in September from 5.0 in August, beating market calls to remain unchanged.
Separately, industry data revealed that Chicago purchasing managers' index hit 55.7 in September from 53.0 in August, beating analysts' calls for a 54.0 reading
The greenback was down against the pound, with GBP/USD up 0.12% at 1.6204.
Manufacturing activity in the U.K. slowed slightly in September but remained close to August's two-and-a-half year highs.
Markit said that its U.K. manufacturing PMI declined to 56.7 in September from a downwardly revised 57.1 in August. Analysts had expected the index to tick up to 57.3.
The dollar was down against the yen, with USD/JPY down 0.39% at 97.84, and flat against the Swiss franc, with USD/CHF unchanged at 0.9056.
The dollar was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.16% at 1.0325, AUD/USD up 0.73% at 0.9392 and NZD/USD trading down 0.36% at 0.8272.
The Australian dollar saw demand after the Reserve Bank of Australia left interest rates on hold at 2.5% on Tuesday and said the full effects of previous rate cuts were still coming through.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.15% at 80.21.
On Wednesday, the U.S. is to release the ADP report on private-sector nonfarm payrolls, which is often seen as a precursor to the closely watched government report on Friday.
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