In U.S. trading on Friday, EUR/USD was up 0.23% at 1.3551.
Expectations for an end to the U.S. fiscal deadlock grew after Republicans on Thursday offered to extend the government's borrowing authority for several weeks, temporarily staving off a default and bolstering demand for the greenback.
The White House has yet to agree on the offer, which capped the dollar's gains, though talks between President Barack Obama and congressional Republicans continued Friday, which supported the greenback against the single currency somewhat.
Elsewhere, the Thomson Reuters/University of Michigan's preliminary consumer sentiment index for October fell to 75.2 from a reading of 77.5 in September.
Analysts were expecting a downtick to 76.0, and the disappointing figure capped the greenback's advance.
The study also found that inflation expectations for this month declined to 2.9%, from 3.3% in September.
Earlier Friday, Japan Minister of Economy Akira Amari urged U.S. politicians to show some responsibility, stressing that if the current shutdown was allowed to continue, the U.S. could default on its debt.
U.S. Treasury Secretary Jack Lew reiterated Thursday that the U.S. will reach its debt ceiling on Oct. 17 and warned that the political crisis is starting to hurt the economy. Lew was making his comments during testimony before the Senate finance committee.
The greenback was up against the pound, with GBP/USD down 0.07% at 1.5956.
The dollar was up against the yen, with USD/JPY up 0.35% at 98.50, and down against the Swiss franc, with USD/CHF down 0.04% at 0.9114.
The dollar was down against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.41% at 1.0355, AUD/USD up 0.16% at 0.9468 and NZD/USD trading up 0.51% at 0.8325.
In Canada earlier, official data revealed that the number of employed individuals rose by 11,900 in September, above expectations for a 10,000 increase, after 59,200 rise the previous month.
The report also showed that Canada's unemployment rate ticked down to 6.9% last month, from 7.1% in August. Analysts were expecting the unemployment rate to slip to 7.0% in September.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.13% at 80.47.
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