The dollar fell against the Swiss franc on Thursday as record high oil prices and geopolitical tensions prompted safe-haven currency flows, while the yen was firm on expectations of a Japanese interest rate rise this week.
Analysts said the collapse of talks between South Korea and North Korea over a missile crisis, tensions between world powers and Iran over Tehran's nuclear programme and Israel's bombing of Lebanon's Beirut airport supported the Swiss franc.
The yen rose against the dollar and the euro as the Bank of Japan began a two-day policy meeting which is widely expected to result in a rise in Japanese interest rates for the first time in six years.
"Geopolitical risks are coming more to the fore in the market, at least today when there is no major data from the US," said Adarsh Sinha, currency strategist at Barclays Capital. "The yen is up ahead of the BOJ meeting - market expectations are for a 25 basis point rise."
Oil prices also figured in the dollar's losses as IPE Brent crude oil futures and NYMEX crude oil hit record highs above $75 a barrel. The dollar fell as far as 1.2282 Swiss francs but recovered to 1.2312 francs by 1130 GMT, down 0.2 percent from the US close.
The euro fell a third of a percent against the Swiss franc to two-week lows. The euro was also trading at the day's lows of $1.2685, down slightly from the US close.
The dollar steadied at 115.38 yen after falling to 115 in European trade, while the euro was down slightly against the yen at 146.44, off earlier lows of 146.26.
The Australian dollar hit six-week highs against the US dollar as strong Australian employment data fuelled talk of a rate rise in August.
Markets are also speculating about a rate rise in China, normally a positive for neighbouring currencies such as the yen, nearly a year after China revalued its currency.
US weekly jobless claims at 1230 GMT are forecast to show a rise to 318,000. European Central Bank Governing Council member Nout Wellink and Minneapolis Fed President Gary Stern speak at separate events later.