The dollar widened its losses after the release of a report showing U.S. jobless claims rose more than forecast last week.
Initial jobless claims rose to 285,000 last week, compared to 278,000 a week earlier and median estimates of 279,000.
The report comes one day before the release of the awaited jobs report that provides a clearer picture about the health of the labor market.
American employers probably created 189,000 jobs last month, following a robust 292,000 jobs added in December, while unemployment stabilized at its record low of 5 percent, according to the NFP forecasts.
The most recent data from the U.S. has raised concerns about the growth outlook and the Federal Reserve’s interest rate prospects.
Financial conditions have tightened significantly and the weakening global view could have “significant consequences” to the U.S. economy, Dudley said on Wednesday.
It seems that the Fed would adopt a more careful pace of rate hikes this year amid the turbulence in global financial markets.
The dollar index, which tracks the greenback’s movements versus a basket of major currencies, fell to a low of 96.26, while currently hovering around 96.56, set for its steepest weekly decline since mid-2009.
The dollar dropped to a 3-1/2 month low against the euro despite the persistence of ECB President Mario Draghi of acting in March, if necessary.
