The dollar fell against other major currencies Friday as weak Chinese data stoked fresh jitters about the slowdown in the world's second-largest economy and its impact on global growth.
"A hazy outlook for US interest rates and persistent concerns about the shape of the world economy continued to weigh on America's currency," said Joe Manimbo of Western Union Business Solutions.
The greenback was on the defensive amid a global equity selloff after a Chinese manufacturing report showed activity contracted the most since the 2009 financial crisis.
The rout on Wall Street was severe: the Dow Jones Industrial Average plummeted 3.1 percent to a 10-month low, entering correction territory with a loss of more than 10 percent since its peak in mid-May.
The dollar, typically a safe-haven currency in times of uncertainty, remained under pressure after Federal Reserve minutes released Wednesday seemed to lower the likelihood the Fed will raise near-zero interest rates as early as September.
"It used to be that in times of trouble, the US dollar reigned supreme," said Kit Juckes of Societe Generale in a client note.
The dollar fell 1.3 percent against the euro, at $1.1386, and 1.1 percent against the yen, at 122.06 yen, compared with late Thursday.
Juckes said the pattern this week has been for the dollar to drift lower against the euro and yen, and soar against a range of emerging market currencies.
"It's a pattern that is unlikely to change much unless or until better US data give the dollar a lift and change the debate about Fed policy, or better Chinese data change the debate about PBoC (People's Bank of China) policy and the outlook for emerging market assets and commodities," he said.
Omer Esiner of Commonwealth Foreign Exchange said the euro was benefiting "as investors unwind trades in assets like emerging markets stocks and bonds and riskier assets in general."
"In general they're forced to buy back the euro that in many case is used as a funding currency to buy these assets."