The gloom in US dollar trading continued into the European session, paving the way for most major currencies to post gains.
The euro returned to a parity price of 1,000 against the US dollar after showing a better-than-expected reading in the German business sentiment survey report in August.
Even so, the increase recorded was somewhat limited as investors also focused on the minutes of the European central bank (ECB) meeting that will be released today.
Also in the focus of the market is the release of preliminary estimates of the gross domestic product (GDP) of the United States which is expected to record contraction in the second quarter.
Against a basket of major currencies, the dollar index traded lower at 108.15 in the European session.
Commodity currencies were among the best performers following the USD weakness, with the Aussie dollar and kiwi trading higher despite disappointing New Zealand retail sales data in the second quarter.
The Aussie dollar's surge was fueled by the Chinese yuan's recovery from two-year lows, helped by stronger-than-expected official guidance.
Meanwhile, the Canadian dollar was also stronger after receiving support from the price of crude oil which jumped high following the warning given by Saudi Arabia about reducing oil production.
