The Dollar Index snapped a five-day rally, the longest since February, after weaker-than-forecast reports on U.S. unemployment claims, housing and inflation damped bets the Federal Reserve will slow its bond purchases.
The euro gained the most in almost three months against the dollar as European Central Bank President Mario Draghi said policy makers were “ready to act” after leaving their benchmark rate at a record low.
The yen surged to the strongest in more than eight years versus the euro on concern that slowing growth in China will hurt economic recovery and European banks face higher rates when they refinance central-bank loans.
The dollar fell to the weakest level against the euro in seven weeks as jobless claims rose to a one- month high, increasing speculation that the Federal Reserve will seek to stimulate economic growth.
The dollar weakened against most of its major counterparts after Federal Reserve Chairman Ben S. Bernanke kept the door open to doing more to prop up the U.S. economy if necessary, damping demand for the currency.