The dollar dropped across the board on Thursday after weaker-than-expected U.S. economic data, although its outlook remained upbeat as many investors continued to price in an interest rate hike by the Federal Reserve some time this year. The dollar index, a gauge of its value against six major currencies, fell after two straight days of gains. For the month of February, the dollar index was down 0.5 percent, on track for its first monthly loss in eight months.
U.S. retail sales fell 0.8 percent last month, while jobless claims rose above 300,000 in the latest week.
"There's obviously disappointment over the weak headline numbers, although these numbers should not alter rate hike expectations to any significant degree,'' said Shaun Osborne, chief currency strategist, at TD Securities in Toronto.
"Most of what Fed governors are telling us seems to be that the second half of the year is a good time to expect the first hike. They won't react to one or two numbers.''
In mid-morning New York trading, the dollar index was down 0.7 percent to 94.33. The dollar fell 1.1 percent against the yen to 119.12
The euro rose to one-week highs versus the dollar and was last up 0.4 percent at $1.1380.
"Even with the soft U.S. numbers, euro/dollar is struggling to hold on to their highs,'' said TD's Osborne. "I don't expect the euro to do that much better. The stabilization we have seen is really just a result of being oversold longer term.''
The euro got a little bit of a break after the European Central Bank extended emergency liquidity assistance of about 5 billion euros for Greek banks, but the fate of Greece's international bailout deal still remains uncertain.
Read More Greek drama as bailout talks break down
Greece's new leftist Prime Minister Alexis Tsipras told EU leaders that the austerity plan is killing his economy and they must find an alternative.
The Swedish crown fell to its weakest level since April 2009 against the dollar, which was last up 0.9 percent at 8.4554 crowns, after the country's central bank on Thursday cut its key repo rate into negative territory.
Against the euro, the crown was down 1.4 percent, with the single euro zone currency last trading at 9.6318 crowns.