The US dollar dropped against most major currencies as investors lowered their expectation for an interest rate hike as early as September, following the release of weak economic data from China.
The Caixin Flash China General Manufacturing Purchasing Managers' Index retreated to 47.1 in August from 47.8 in July, the lowest level since March 2009.
Analysts on Friday said the soft Chinese data added to the sliding commodity prices, raised uncertainties on the timing of the Federal Reserve raising interest rates, Xinhua reported.
They said that higher rates would increase borrowing costs for companies and consumers, causing possible damage to the global economic growth.
The US dollar was further under pressure as the country's economic data came out negative. Financial data firm Markit reported on Friday that US manufacturers indicated a renewed loss of momentum during August.
The dollar index, which measures the greenback against six major peers, was down 1.04 percent at 94.981 in late trading.
In late New York trading, the euro rose to $1.1359 from $1.1193 in the previous session and the British pound climbed to $1.5703 from $1.5672 in the previous session. The Australian dollar inched down to 0.7329 dollar from 0.7337 dollar.
The US dollar bought 122.06 Japanese yen, lower than 123.48 yen of the previous session, dived to 0.9486 Swiss franc from 0.9619 Swiss franc and surged to 1.3170 Canadian dollars from 1.3097 Canadian dollars.
--Indo-Asian News Seervice
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