The U.S. dollar weakened on Wednesday as investors repositioned ahead of Friday's highly anticipated jobs report, but pared losses on a strong non-manufacturing report.
Improving U.S. data along with the prospect of U.S. tax cuts and the likelihood that the Federal Reserve will raise interest rates in December have boosted the U.S. currency in recent weeks.
Traders have been cautious this week on the greenback, however, on concerns that recent hurricanes may hurt last month's hiring report.
"People were afraid of the impact of hurricanes on payrolls," said Boris Schlossberg, managing director of FX strategy at BK Asset Management.
The dollar index was last down 0.14 percent at 93.44, after earlier falling as low as 93.259.
The dollar pared losses after the Institute for Supply Management's non-manufacturing index rose to its highest level since August 2005 in September and the prices paid index reached its highest level since February 2012.
"The data seems to be supportive all the way across the board for a Fed hike in December," said Schlossberg.