The dollar slipped against a basket of major currencies such as the euro and Japanese yen on Thursday after worries about global growth led traders to sell riskier assets and favor lower-yielding currencies.
Concerns that China and other emerging markets could face more economic weakness led traders to sell the dollar and riskier assets such as U.S. stocks and buy back currencies such as the euro and yen, which are cheap to own since the European Central Bank and Bank of Japan are keeping rates low through stimulus measures.
That dynamic weakened the dollar, since the U.S. Federal Reserve's intent to tighten monetary policy by raising rates has made it less favorable as a funding currency, analysts said. Traders also looked ahead to a speech from Fed Chair Janet Yellen at 5 p.m. ET (2100 GMT).
The Fed, by not hiking rates and noting worries about the global economy last week, has exacerbated nervousness in the market, analysts said.