The US dollar was stronger as unexpected weak data on Chinese manufacturing shook markets and Eurozone private sector business activity slowed in July.
Data showed China's manufacturing activity slumped to a 15-month low in July.
Meanwhile, the US government reported new home sales fell in June, a surprising negative note after a spate of encouraging reports on the surging US housing market.
The US dollar found support as investors increasingly bet on a US rate rise this year.
"The dollar enjoyed broad gains as a bout of profit taking seemed to run its course with the market increasingly looking ahead to next week when the Fed announces a policy decision," said Joe Manimbo at Western Union Business Solutions.
The Federal Open Market Committee, meeting next Tuesday and Wednesday, is expected to leave unchanged the zero-level federal funds rate. But the FOMC statement would be scrutinised for insights into the timing of the rate rise, possibly in September.
"Data this week, including yesterday's drop in weekly jobless claims to over a 40-year low, remained consistent with higher Fed lending rates in the months ahead ... the dollar's longer-term strengthening trend likely remains intact," said Omer Esiner at Commonwealth Foreign Exchange.
The euro was undermined after a closely watched gauge showed slowing activity in the eurozone private sector in July.
The euro was buying US$1.977 and Y135.89, while the US dollar fetched Y123.81.
"Given the extent to which the Greek debt crisis impacted the market in July, the data could have been much worse," Esiner said.
AFP
