During European morning trade, the dollar was lower against the euro, with EUR/USD rising 0.36% to hit 1.3095.
The single currency came under pressure earlier as the European Central Bank failed to convince markets that its unprecedented three-year loan of EUR489.19 billion on Wednesday would improve banks’ prospects in the euro zone and ease concerns over the region’s financial crisis.
Later in the day, Italian Prime Minister Mario Monti was to hold a confidence vote on approving a much needed EUR33 billion emergency austerity package.
The package passed in the lower house last week and was expected to pass without much resistance in the upper house.
The greenback was also lower against the pound, with GBP/USD adding 0.09% to hit 1.5691.
Official data showed earlier that the U.K.’s gross domestic product rose 0.6% in the third quarter, beating expectations for a 0.5% gain.
The report came after data showing that the U.K.’s current account deficit widened unexpectedly in the third quarter to its highest level on record, hitting GBP15.2 billion from a deficit of GBP7.4 billion the previous quarter.
Analysts had expected the U.K.’s current account deficit to narrow to GBP5.6 billion in the third quarter.
The greenback was steady against the yen and lower against the Swiss franc, with USD/JPY easing up 0.02% to hit 78.07 and USD/CHF falling 0.34% to hit 0.9326.
Earlier Thursday, the Bank of Japan warned that the country's recovery has stalled as business sentiment deteriorated in the wake of weaker export demand.
Meanwhile Japan’s government lowered its real gross domestic product forecast earlier to a 0.1% contraction from the 0.5% growth predicted previously, citing a strong yen and the effects of the euro zone’s sovereign debt crisis on Japanese exports.
The greenback was sharply lower against its Canadian, Australian and New Zealand counterparts, with USD/CAD declining 0.32% to hit 1.0234, AUD/USD climbing 0.30% to hit 1.0134 and NZD/USD advancing 0.33% to hit 0.7731.
In New Zealand, official data showed that the country’s GDP rose 0.8% in the third quarter, beating expectations for a 0.6% gain. New Zealand’s GDP grew by an unrevised 0.1% in the previous quarter.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, fell 0.34% to hit 80.08.
Later in the day, the U.S. was to publish its weekly report on initial jobless claims, as well as revised data on third quarter GDP. The University of Michigan was also to release revised data on consumer sentiment and inflation expectations.