The Institute for Supply Management's non-manufacturing index declined to 55.5 percent in April, 0.6 percentage point down from 56.1 percent in March, which marks the slowest reading since August 2017, said the not-for-profit professional supply management organization on Friday.
The reading fell far short of an estimate of 57.5 percent by economists polled by MarketWatch.
The disappointing data has partially offset robust U.S. job statistics in April. U.S. total non-farm payroll employment increased by 263,000 in April, and the unemployment rate declined to 3.6 percent, said the U.S. Bureau of Labor Statistics on Friday, pointing to a bullish labor market.
The dollar index, which measures the greenback against six major peers, decreased 0.31 percent at 97.5208 in late trading.
In late New York trading, the euro increased to 1.1194 dollars from 1.1175 dollars in the previous session, and the British pound rose to 1.3164 dollars from 1.3027 U.S. dollars in the previous session.
The Australian dollar was up to 0.7014 dollar from 0.6997 dollar. The U.S. dollar bought 111.09 Japanese yen, lower than 111.49 Japanese yen of the previous session.
The U.S. dollar fell to 1.0174 Swiss franc from 1.0193 Swiss franc, and it decreased to 1.3427 Canadian dollars from 1.3470 Canadian dollars.