The dollar slumped against major currencies on Thursday, undermined by violence in Iraq and Turkey, along with weak reports that dimmed the lustre of an accelerating US economy.
The US currency fell swiftly against the Swiss franc widely considered a safe-haven in times of global upheaval.
Attacks in Iraq killed nearly 100 people and blasts in Turkey left four dead before the start of US trade. The attacks and unexpectedly soft US economic data helped pry some currencies out of recent ranges, said Greg Anderson, senior currency strategist at ABN Amro in Chicago.
"After having so many consecutive blockbuster economic reports over the last several months, the fact that durable goods came in negative for two consecutive months took some steam out of (upbeat) expectations and the Fed need not tighten rates at an accelerated pace," said Michael Woolfolk, senior currency strategist at Bank of New York. Higher US interest rates would make the dollar more attractive to foreign investors.
Although data on May new home sales were surprisingly strong, the report offered only mild support to the dollar.
By late in New York, the euro pushed to session highs around $1.2188, according to Reuters data, and was up 0.7 percent at $1.2177. Against the yen, the dollar fell to 107.16 yen, down 1.2 percent.
Against the Swiss franc, the dollar dropped 0.8 percent to 1.2432 francs. The US dollar also fell steeply against the Australian and Canadian dollars.
US data showed durable goods orders dropped unexpectedly in May, while first-time jobless claims last week increased a bit more than economists had forecast.
The dollar recouped some losses after a report showing sales of new homes jumped 14.8 percent last month to an annual rate of 1.369 million units from an upwardly revised 1.192 million in April. It was the biggest monthly climb since April 1993.
But markets were fixated on the Federal Reserve's monetary policy meeting next week. Traders appear to have fully priced in a quarter percentage point rise in the official federal funds rate from a 46-year low of 1 percent.
Earlier in the global day, the dollar began a sell-off against the yen as data confirmed the strength of Japan's economic recovery and lifted Tokyo's stock market to an eight-week high.
Thursday's upbeat data raised expectations that next week's "tankan" Japanese business confidence survey will produce a strong figure, underscoring Japan's best recovery in over a decade.
"The numbers would suggest that the Japanese authorities would have to accept a stronger yen moving forward. I think we're moving down toward the 106 yen area and further out, we will probably move back down to 103-105 yen," said Shaun Osborne, chief currency strategist at Scotia Capital in Toronto.