GBP/USD failed to break above $1.8500, spurring the position-adjustment. Rate fell to $1.8280 before recovering to $1.8360.
USD/JPY rose from Y108.70 to Y109.90.
The euro rose from a six-month low
versus the dollar as European Central Bank council member Axel Weber said
discussion about a reduction in interest rates is ``premature'' and crude oil
prices increased for a third day.
The currency also advanced on speculation its largest monthly decline against the greenback since its 1999 debut was too big to sustain. The dollar gained versus the yen as orders for U.S. durable goods unexpectedly rose last month.
The Dollar Index dropped even as the Commerce Department reported that bookings for U.S. goods made to last several years increased 1.3% in July after a revised gain of the same amount in the previous month. The median forecast of economists was for no change in durable goods orders.
The euro has fallen 8% from a record of $1.6038 set on July 15 as the European economy shrank in the second quarter and crude oil declined 20% from its all-time high reached last month. The currency has dropped 5.8% against the dollar in August, the biggest monthly decline since the European currency began trading.
In Europe UK CBI retail sales report is due to come with analysts predict sales fell 36% in Aug after -33% in July.In US focus will be on revised 2Q GDP data. Economists expect economy rose 2.7% q/q after previously released 1.9%.