The euro dipped against the dollar on Tuesday after data showing that German economic sentiment unexpectedly deteriorated this month.
EUR/USD was trading at 1.1025, from around 1.1037 ahead of the report.
The closely watched ZEW index of German economic sentiment fell to 25.0 this month from 29.7 in July. Analysts had expected the index to tick up to 32.0.
It was the lowest level in nine months the report said, as concerns over the current geopolitical and global economic situation weighed.
Meanwhile, the ZEW index of euro zone economic sentiment rose to 47.6 in August from 42.7 in July, ahead of forecasts for an increase to 43.9.
The euro rose to two-week highs against the dollar earlier Tuesday after an unexpected devaluation of the yuan by China’s central bank prompted investors to unwind euro-funded positions on the Chinese currency.
China devalued the yuan in a surprise move overnight in an attempt to help exporters after a recent spate of disappointing economic data.
The central bank described it as a "one-off depreciation" of almost 2%, based on a new way of managing the exchange rate that better reflected market forces.
The euro rose to one-and-a-half month highs against the yuan, jumping 1.95%.
The single currency was also boosted following reports that Greece and its international lenders have reached a deal on third bailout.
Greece, which narrowly avoided an exit from the euro zone last month, must repay €3.4 billion to the European Central Bank by August 20.
Elsewhere, the euro was little changed against sterling, with EUR/GBP at 0.7070 and was higher against the yen, with EUR/JPY rising 0.27% to 137.69.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was firm at 97.22, holding below highs of 97.64
