Higher rates in the United States relative to Europe and Asia often make dollar-denominated assets more attractive, stoking demand for the currency.
"I think that the market has seen what it wants to see (in Greenspan's testimony), and the market's bias is still pessimistic," said Jeremy Friesen, senior currency strategist at RBC Capital Markets in Toronto.
In afternoon New York trade, the euro traded higher at $1.3066, up 0.3 percent from late Wednesday's levels, according to Reuters data. Against the yen, the dollar was little changed at 105.49 yen.
The dollar hit three-month highs against the euro and the yen last week and despite Thursday's losses, remains higher against both currencies since the beginning of the year.
Against the Swiss franc, the dollar fell 0.3 percent to 1.1837 francs. Sterling, meanwhile, gained to $1.8946 up 0.5 percent.
The dollar was little changed by the Philadelphia Federal Reserve's business activity index, which rose to a better-than-expected 23.9 in February. Investors instead focused on the breakdown, which indicated lower prices paid and lower employment.
"The headline was stronger than expected and euro/dollar slipped. But look at the details, and it's pretty poor," said Peter Frank at ABN Amro. "There's no support for the dollar in these details."
Earlier in the session, the dollar was well bid after US initial jobless claims fell to the lowest level since October 2000. Weekly claims dropped 2,000 to 302,000 last week, according to the Labour Department. Economists had expected an increase of 11,000.
"I think investors are gradually building up hopes that the coming February payrolls would be a good one, a bit of payback after some disappointing jobs numbers," said Sean Callow, currency strategist at IDEAglobal in New York.
Another report showed US import prices rose a higher-than-expected 0.9 percent in January, fuelled by higher oil costs. Analysts had expected a 0.7 percent rise after declines in November and December.
They said the data fueled some dollar buying as higher import prices suggested that the US currency's recent weakness is having an impact in stabilising the US current account deficit, a broad measure of the nation's global trade.
A weaker dollar makes imports more expensive, which should discourage US consumers and manufacturers from buying overseas. That should help ease the current account shortfall.