The dollar drifted lower on Thursday as traders puzzled over data sending contrary messages about the U.S. economy and prospects for a 2015 interest rate hike by the Federal Reserve.
A day before September's potentially market-rattling U.S. employment data, separate reports showed growth at U.S. factories slowed in September while weekly jobless claims pointed to a tightening labor market.
The data could complicate the Fed's plans to raise rates, a key attraction of the dollar for yield-hungry investors.
"The (Institute for Supply Management report on factories) was a little less than consensus, edging closer to that 50 level that marks expansion from contraction," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange. "Importantly we saw a downturn in the employment component of the ISM."