The dollar fought back from the previous day's sharp correction versus a basket of major currencies yesterday, helped by easing oil and a tumbling pound after growth data increased chances of recession in the United Kingdom.
Oil lost traction after surging nearly 5.0 per cent on Thursday.
It was last at $120.53 a barrel, down 0.65 per cent on the day, taking the heat out of upside inflation risks and aiding the dollar.
Sterling fell more than 1.0 per cent versus the dollar after second-quarter gross domestic product (GDP) showed the UK economy ground to a halt in the three months to June, down from a preliminary estimate of 0.2 per cent growth and undershooting analysts' forecasts for a revision to 0.1 per cent growth.
That was the weakest performance since the recession of the early 1990s.
The poor UK growth numbers add to an overall bleak picture of a slowing European economy after data showing contraction in euro zone GDP, increasing the possibility of European Central Bank and Bank of England monetary easing.
"We had a bit of a correction of dollar decline before the UK GDP data.
"The UK figures, as well as hitting the pound, also pressured the euro as that was a sign that growth in Europe is slowing down," said Marcus Hettinger, global FX strategist at Credit Suisse. By 1102 GMT, the euro had fallen 0.5 per cent to $1.4828, edging towards a six-month low hit earlier this week at $1.4628.
Sterling slid 1.1 per cent to $1.8589, while trade-weighted sterling hit its lowest since late 1996.
The pound's losses helped fuel a 0.6 per cent rise in the dollar versus a basket of major currencies to 76.479, moving it closer to 77.413 hit on Tuesday, its strongest since December.