The British pound, which rose on optimism about the chances of a Brexit deal following a Bloomberg report on Wednesday, added to gains despite Germany appearing to shoot down the report.

Sterling was up 0.32 percent against the dollar.

"Brexit talks between the UK and Germany is helping sterling and the euro," said Dean Popplewell, vice president of market analysis at OANDA, in Toronto.

"There seems to be a slight move toward adding some risk to peoples' positions at the moment," said Popplewell.

The euro was 0.08 percent higher against the greenback.

"Euro should be on recovery mode since Italy seems to want to behave in the eyes of the EU when it comes to spending," said Juan Perez, currency trader at Tempus Consulting in Washington.

Italian debt is heading towards one of its best weeks since the euro zone debt crisis as the Italian anti-austerity government's apparent willingness to curb budgetary excesses has offered relief to the market.

The dollar, which has benefited in recent days from weakness in emerging market currencies, eased a little as the MSCI EM Currency Index rose 0.05 percent.

The dollar index, which measures the greenback against a basket of six currencies, was down 0.18 percent at 95.011.

The ADP National Employment Report showed private payrolls increased by 163,000 jobs last month. Economists polled by Reuters had forecast private payrolls increasing by 190,000 jobs last month. The report was published ahead of the government's more comprehensive employment report for August on Friday.

While the ADP report has a spotty record predicting the private payrolls component of the employment report, it was "perhaps a hint that employment growth has started to fade again after a very strong first half of the year," said Paul Ashworth, chief US economist at Capital Economics in Toronto.

The greenback is likely to be well supported in coming days as investors look to the safe-haven currency amid continuing uncertainties on the trade front, analysts said.

Trump could impose levies on $200 billion more of Chinese imports on Thursday when a public comment period on the new tariffs ends. That would represent a significant ramping up of the trade war between the world's two largest economies.

"The dollar is still in demand on pull-backs," said Popplewell.

Elsewhere, the Swedish crown slipped about 0.5 percent versus the greenback after the Swedish central bank kept rates unchanged and closed the door to a rate hike in October.