The dollar weakened against the euro on Thursday despite a fairly healthy batch of economic data, hit by profit-taking after the US currency's rally on Wednesday.
In late afternoon trade in New York, the euro rose 0.27 percent against the dollar to $1.2706.
"The dollar today is barely holding on to the day's gains which were partially helped by the larger than expected fall in the jobless claims numbers and the average work week component of the Philly Fed index which almost doubled," said Ashraf Laidi, chief currency analyst at MG Financial Group in New York.
Earlier the dollar spiked briefly after the government said new claims for state unemployment benefits dropped to 344,000 in the week ended February 14 from a revised 368,000 the previous week. The market had expected 353,000 new claims.
The dollar reacted mildly to the Philadelphia Federal Reserve Bank's monthly gauge of regional industry slipping to 31.4 in February from 38.8 in January, which had been the highest since 1984. Economists had expected a reading of 35.
But the component measuring the average work week for employees in the mid-Atlantic region jumped to its highest level since the survey began in 1968, to 23.6 from 12.9 in January, providing hope that job gains will pick up.
"Overall, short-term dollar bears are still affected by yesterday's sharp rebound in the dollar," Laidi said.
Earlier on Thursday, the dollar rose to a one month-high of 107.43 yen, before trading back down to 107.13 yen still up about 0.3 percent on the day.
The US currency fell 0.3 percent against the Swiss franc to 1.2387 francs. Sterling, recently pushed higher on expectations of a rate hike, traded around $1.8937 up about 0.4 percent.