Commodity-linked major currencies including the Australian and New Zealand dollars surged on Thursday as oil traded back above $33 a barrel, its highest levels in almost three weeks.
A mixed performance for other majors after Wednesday's Federal Reserve statement saw the dollar trade flat against the euro and marginally higher against the while losing around a quarter of a percent to sterling.
The yen also got a brief boost from the resignation of Japan's Economy Minister Akira Amari following a row over allegations he received bribes from a construction company.
The gained almost 0.8 percent to $0.7081 in early trade in Europe, nearing three-week highs hit a day earlier.
The New Zealand dollar was just under half a percent higher, held back by signals from its central bank that further easing of interest rates may be required in the face of a poorer global economic outlook.
"The kiwi clearly underperformed after the Reserve Bank meeting overnight," said Richard Benson, co-head of portfolio management at currency fund Millennium in London.
"Stocks did end down in the U.S. but there are other more bullish signals. Oil is back above $33, the U.S. 10-year yield is above 2 percent. The Aussie and New Zealand dollars have held up well."
A renewed slide in oil prices, together with concerns over China, has been at the heart of a deepening global sell-off on stock markets since the first week of January.
That had knocked the Aussie back by as much as 6 percent since the start of January but it has halved those losses in the past 10 days.
With the Fed out of the way, the focus moves on to the Bank of Japan, which started its two-day policy meeting on Thursday with traders saying markets were factoring in up to a 50 percent chance of more measures to ease monetary policy.
"It is a tricky situation. If they don't ease, the yen will strengthen and stocks will fall. But even if it does something, the impact may (only) last a week or so," said Masatoshi Omata, senior client manager at Resona Bank.
"But after that, markets could start to worry whether its monetary stimulus is really working."
The traded 0.1 percent lower against the dollar at 118.28. The euro was broadly flat at $1.0898.