The euro dropped to a 5 1/2-month low against the dollar after crude oil fell and a report showed Europe's economy contracted for the first time since the 15- nation currency was introduced almost a decade ago.
Europe's economy shrank 0.2% in the second quarter, after growing 0.7% in the first, the European Union's statistics office said from Luxembourg.
Official figures on Thursday showed that the French economy contracted by 0.3% in the second quarter, compared with predictions of 0.2% expansion.
Germany, the euro zone's economic powerhouse, shrank by 0.5%, not quite as much as the 0.8% contraction analysts had expected.
Released reports showed US consumer prices surged more than expected during the month of July. The index, a key measure of inflation, rose 0.8% in July, more than twice what economists were anticipating, versus a 1.1% gain the previous month. The so-called core CPI, which excludes the volatile food and energy prices, increased 0.3% in July on a monthly basis. Analysts had expected an increase of 0.2%. The annual rate climbed to 5.6%, hitting its highest level since 1991.
More Americans than forecast filed initial claims for jobless benefits last week, signaling further weakness in the labor market. The number of first-time applications decreased to 450,000 in the week ended Aug. 9, compared with the median forecast of 435,000 of economists.
EUR/USD printed highs on $1.4950 before corrected to $1.4914. General demand on dollar continued to drag the euro down to $1.4775 lows.
GBP/USD initially rose to $1.8770/80 before offers capped further rise and pound retreated to $1.8660. Rebound to $1.8700 was short-lived and pound fell to $1.8650.
USD/JPY rose from Y109.00 to Y109.80. Later rate was back to Y109.30, where it mat new buyers and recovered to Y110.00.