The euro hit a three-week high against the greenback of $1.13875 and was set to mark its highest percentage gain against the dollar in four weeks, at 1.3 percent. The dollar hit a three-week low against the Swiss franc of 0.95870 franc, while the dollar index also hit a three-week low of 94.692.
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The dollar rose, however, against the safe-haven yen as the outlook for accommodative central bank policy around the world drove traders into riskier currencies.
The Australian dollar hit a 7-week high against the greenback of $0.7344 and was set for its strongest weekly performance since late 2011 on gains in commodity prices and the view that accommodative central bank policies would support global growth.
The New Zealand dollar, another commodity currency, hit a more than 10-week high against the dollar of $0.6722.
Some riskier emerging market currencies also gained against the dollar on the outlook for accommodative central bank policy. The dollar was last down 0.82 percent against the Brazilian real to trade at 3.7522 reals after hitting a more than five-week low of 3.7239 reals earlier in the session.
"Metals had a good day, which is good for commodity currencies, and central banks are not removing accommodation, which is good news as well for risk appetite," said Richard Franulovich, senior currency strategist at Westpac in New York.
The euro was last up 0.71 percent against the dollar at $1.13555. The dollar was last down 0.47 percent against the franc at 0.96150 franc. The dollar was last up 0.28 percent against the yen at 120.270 yen.
The dollar index was last down 0.44 percent at 94.896.