The dollar was on the back foot against the euro and the yen in subdued pre-holiday trade on Wednesday but gained ground against sterling on a belief that British interest rates could move lower.
The pound was rattled after minutes of the Bank of England's latest Monetary Policy Committee meeting showed that some members felt that the next move in borrowing costs should be down although all nine members voted to keep rates steady.
"The minutes were surprisingly dovish," said Daragh Maher, foreign exchange strategist at Calyon. "It does seem to justify the view that rates will move down," he added.
Britain's central bank has raised rates five times since November last year, bringing borrowing costs to 4.75 percent.
The dollar weakened a touch against other major currencies but was still wedged in a tight range.
The greenback was at $1.3395 per euro by 1100 GMT, lower than New York levels and within sign of its record low hit earlier this month. It stood at 104.13 yen, down around 0.2 percent on the day.
Sterling fell as low as $1.9168, down more than half a percent on the day. It fell half a percent against the euro to around 69.85 pence, a three-week low and extending losses after poor property market data earlier this week.
The euro showed little reaction to industrial orders and current account data.
Euro zone industry orders were up 0.2 percent on the month in October and up 0.6 percent on the year. Data also showed that the current account surplus widened to 1.1 billion euros, while investment flowed out of the euro zone.
"It's very subdued really. Euro/dollar seems content to trade within the range," said Kamal Sharma, foreign exchange strategist at Dresdner Kleinwort Wasserstein. "Our bias is to sell euro into rallies toward $1.34.(Reuters)