The dollar fell against a basket of currencies on Thursday and hit a two-week low against the Japanese yen, after U.S. President Donald Trump called off a summit meeting with North Korean leader Kim Jong Un and as traders booked profits following the greenback's recent rally.
Trump called off the planned June 12 summit meeting with the North Korean leader even after North Korea followed through on a pledge to blow up tunnels at its nuclear test site.
"There is a slightly more risk-off mood in global financial markets as a result of that announcement," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington D.C.
The , which tends to rise in times of market turbulence, hit to a two-week high against the greenback. The dollar was down 0.81 percent at 109.18 yen. The South Korean won slipped 0.6 percent against the dollar.
"What we are noticing in the market is a sudden change in investor sentiment, where traders are becoming less inclined to look at riskier assets and are encouraged to safe havens instead," Jameel Ahmad, global head of currency strategy and market research at online brokerage FXTM, said in a note.
The dollar index, which measures the greenback against a basket of six other currencies, was down 0.25 percent at 93.766. Despite the weakness on Thursday, the index is up about 2 percent for the month, on pace for its second straight month of gains.
The dollar's rally had already begun to lose steam following the release on Wednesday of the minutes of the Federal Reserve's last policy meeting.
While most policymakers thought it likely another U.S. interest rate increase would be warranted - in line with market expectations - the minutes showed the Fed would tolerate inflation rising above its goal for a time.
"In light of the dollar's impressive rally now that stretches back to mid April, the minutes provided a bit of an excuse to take some money off the table ahead of the holiday weekend here," said Esiner.
The euro was up 0.26 percent at $1.1726. Still, it was set to be down for a sixth consecutive week against the dollar, its longest such streak since January 2015, hobbled by worries over a deepening economic slowdown in the currency bloc.
The leader of the far-right League, a partner in Italy's planned coalition government, insisted that eurosceptic economist Paolo Savona should be named economy minister. This pressured the euro, limiting its gains for the day.
Sterling rose after upbeat British retail sales data, but eased off session highs due to persistent concerns over Brexit negotiations.
Turkey's lira weakened more than 2 percent, retreating from hefty gains made on Wednesday when the central bank raised interest rates 300 basis points.