The dollar lost more ground against the majors in New York as traders pushed the greenback lower on the mixed US economic data.
US jobless claims printed at 302 thousand versus the estimates of 315 thousand, boosting estimates for next week's non-farm payrolls. The Philadelphia Fed index which tracks manufacturing activity rose to 23.9 in February versus the expectations of 17.5 as manufacturing sector became more optimistic about the US economy. Leading indicators printed at -0.3 percent, below expectations of -0.2 percent for the month of January, as half of the indicator's components.
The greenback bears returned to the market in force and sold the dollar as the second day of the Fed Chairman Alan Greenspan's testimony brought no surprises since he maintained that the current US benchmark rates are "fairly low", suggesting that the pace of the rate hikes will continue. The markets shrugged of Alan Greenspan's comments and scattered dollar bids as majors resumed their advance against the greenback. The latest sell-off was due to prevailing speculation that US Current Account and Trade deficits are directly responsible for the dollar weakness, as the US needs to attract more international capital to fund its deficit gap.
The US dollar was quoted at 1.3073-76 against the euro, 1.8947-52 versus the British pound and 105.47-51 against the Japanese yen at 23:00 GMT.
Wall Street stocks lost ground despite the number of companies beating their estimates as traders sold stocks on geopolitical tensions in the Middle East and investor's pessimism regarding the US economic growth.
Dow Jones Industrial Average lost 0.7 percent to 10,754.26 and the Standard and Poor's 500 index shed 0.8 percent at 1,200.75. The NASDAQ Composite index was off by 1.3 percent to 2,061.34.
Wal-Mart Stores gained 0.2 percent to $52.70 after reporting better than expected earnings.
Target rallied 2.2 percent to $50.16 after the retailer's earnings beat analyst expectations.
Radio Shack lost 10.3 percent to $29.93 after the electronics store lowered its guidance.
The NYMEX crude oil futures contract for March delivery fell 80 cents to $47.53 a barrel after a government report showed an increase in gasoline inventories.
COMEX gold futures contract for April delivery gained $1.70 to $428.60 per ounce after the US leading indicators declined in January.