The dollar index, which measures the greenback against six major peers, fell 0.42 percent to 106.3469 in late trading.
U.S. initial jobless claims ticked up slightly to 207,000 in the week ending Sept. 30, according to U.S. Labor Department data Thursday. After initially jumping on the jobless claims report, the yield on the 10-year Treasury later pulled back at 4.71 percent, down from 4.73 percent late Wednesday.
"The small rise in jobless claims suggests layoffs remain historically low overall, but that could change the longer the United Auto Workers strike persists. As it expands, more suppliers might be forced to temporarily lay off non-striking workers, who are eligible for unemployment-insurance benefits," said Eliza Winger, economist at Bloomberg.
Investors now turned their attention to the release on Friday of the Labor Department's jobs report for September, helping determine whether the Federal Reserve will keep rates higher for longer.
In late New York trading, the euro rose to 1.0550 U.S. dollars from 1.0503 dollars in the previous session, and the British pound increased to 1.2194 U.S. dollars from 1.2137 dollars.
The U.S. dollar bought 148.4060 Japanese yen, lower than 149.0600 Japanese yen of the previous session. The U.S. dollar decreased to 0.9129 Swiss francs from 0.9170 Swiss francs, and it fell to 1.3713 Canadian dollars from 1.3745 Canadian dollars. The U.S. dollar slid to 11.0066 Swedish krona from 11.0701 Swedish krona.
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