The Australian dollar gained a lift from strong Australian jobs data, while the greenback struggled to gain traction after weak US output data added to uncertainty over the timing of a Federal Reserve interest rate rise.
The Australian dollar climbed 0.9 percent to $0.7752 as upbeat Australian jobs data prompted the market to scale back bets for another interest rate cut by the Reserve Bank of Australia.
The Aussie dollar now faces resistance at $0.7784, the 61.8 percent retracement of its March 24 to April 2 decline.
"Overall it's still a US dollar story and if the big US dollar correction continues, the Australian dollar can climb higher," said Jeffrey Halley, a trader for Saxo Capital Markets in Singapore.
The dollar struggled to gain traction against a basket of major currencies, with the dollar index last trading at 98.316 , having set a one-week low of 97.897 earlier on Thursday.
Not helping dollar bulls, data on Wednesday showed US industrial production recorded its biggest drop in more than 2-1/2 years in March.
The dollar had come under broad pressure earlier on Thursday on the back of a bounce in the euro, which rose to as high as $1.0748.
"Euro/dollar broke a previous high...and that's triggered some stops," said Jesper Bargmann, head of trading for Nordea Bank in Singapore, referring to the euro's rise earlier on Thursday.
The euro later pared its gains and last stood at $1.0689, up 0.1 percent on the day.
The dollar rose 0.2 percent to 119.33 yen, having slipped to around 118.80 yen earlier on Thursday.
The dollar now has support at the bottom of the daily Ichimoku cloud, near 118.95 yen.
The Canadian dollar touched a fresh three-month high, after the Bank of Canada on Wednesday surprised markets yet again, this time by indicating no further easings are imminent. In January, the BOC stunned investors with a cut.
The Canadian dollar rose to as high as C$1.2251 per US dollar earlier on Thursday, its strongest level since January 21. The loonie last stood at C$1.2280.
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