The dollar nursed modest losses on Thursday, having suffered a setback on fresh signs that the U.S. economy slowed significantly in the first quarter a factor that could delay the Federal Reserve's decision to begin hiking interest rates.
The dollar fell as far as 119.42 yen overnight, from levels above 120.00 ending the day’s trading at 119.57, down 0.2 percent on the day.
Data on Wednesday showed U.S. private employers added the smallest number of workers in more than a year in March and factory activity hit a near two-year low, highlighting the impact of a harsh winter, weaker global demand and a strong dollar.
"Right now the market's worry is the Fed showing concern about a strong dollar, and the data only compounded such fears," said Masashi Murata, senior currency strategist at Brown Brothers Harriman in Tokyo.
"Even if Friday's non-farm payroll number is decent -it could come in around 250,000- that might not dispel strong dollar concerns. That is why there isn't much bargain hunting for the dollar," he said.
For the closely-watched U.S. non-farm jobs data due on Friday analysts expect a rise of 245,000 in March, following a gain of 290,000 in February.
"Another print above 200,000 in March would represent the 13th in a row, a string of persistent strength that has not been seen since 1977," said Greg Moore, senior currency strategist at RBC.
Europe Stronger
In contrast to the United States, figures out of Europe were much more encouraging with manufacturing activity across the euro zone accelerating and adding to signs the bloc's economy is recovering.
The euro climbed to $1.0800 from one-week lows of $1.0713. It last stood flat at $1.0764. Wariness over Greece's debt negotiations with lenders prevented the euro from making more gains.