The euro pared earlier gains to trade at $1.13, down from a more than two-week high of $1.137, after U.S. President Trump reignited trade tensions by saying Friday that talks with the EU were "getting nowhere" and proposing 50% tariffs on European goods starting June 1.

Even so, concerns about US trade policy and the growing national debt continued to weigh on the dollar, further weighed down by the narrow passage of Trump's new tax bill in the House of Representatives.

On the monetary policy front, the ECB is expected to significantly lower interest rates at its June meeting, followed by a likely break to assess the impact of US trade measures on inflation.

German first-quarter GDP growth was revised upwards and the German Ifo business climate index for May beat expectations, but these positive signals were offset by a disappointing eurozone PMI survey, which showed an unexpected contraction in private sector activity.