The dollar index =USD, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.07% to 99.88, with the euro EUR= up 0.1% at $1.1536.
Traders have been weighing whether the Fed will need to raise rates, as inflation remains stubbornly above the central bank's 2% target and oil prices climb amid Iran-related disruptions in the Strait of Hormuz.
Oil prices declined on Thursday as investors assessed prospects for weaker global demand this year and higher U.S. crude stocks.
Other data on Thursday showed that the number of Americans filing claims for unemployment benefits increased moderately last week, suggesting that the labor market remains stable despite July's surprise job losses.
The Japanese yen JPY= strengthened 0.14% to 159.19 per dollar.
The Japanese currency has given back some of the gains from last month's historic joint intervention by the U.S. and Japan. That intervention has fueled market bets that the Bank of Japan will need to hike rates faster and further, raising the stakes for the currency heading into next month's policy meeting.
The pound GBP= strengthened 0.08% to $1.3503. The UK economy unexpectedly grew in June, thanks to a dip in energy prices, along with the start of the men's soccer World Cup and hot weather.
The Norwegian crown weakened after Norges Bank left interest rates unchanged, as expected, while flagging that inflation had softened recently. At 4.25%, Norway holds one of the highest interest rates among the 10 most developed economies, and its status as an oil and gas exporter has given the crown a boost this year.
Against the Norwegian krone, NOK=, the dollar strengthened 0.34% to 9.515.
Dollar weakens after flat producer prices
NEW YORK, Aug 13 (Reuters) - The dollar fell on Thursday after data showed producer prices were unchanged in July, coming after Wednesday’s consumer price inflation report that showed that U.S. consumer prices barely increased last month.
The flat reading in the Producer Price Index for final demand last month followed a revised 0.1% drop in June. Economists polled by Reuters had forecast the PPI rebounding 0.2%.
The soft data led traders to further pare back expectations of a Federal Reserve rate hike in September. Fed funds futures now show a 31% probability of a September hike, down from 40% on Wednesday and 55% a week earlier.
Noel Dixon, senior macro strategist at State Street, said the components of Thursday's report that feed into the personal consumption expenditures data due later this month suggest that the report "should be pretty good."
"My takeaway from that number and yesterday's number is that it helps to make the case for the Fed staying on hold in September," Dixon said.
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