The greenback fell against most of the other major currencies (except Japanese yen) on Thursday as data from the U.S. showed the economy returned to growth in the third quarter, reducing the U.S. currency's safe-haven allure and sending investors elsewhere for better returns. In addition, the rally in U.S. and European stock markets also put pressure on the greenback and the ICE dollar index (which measures dollar's strength against a basket of six other currencies) dropped by almost 0.5 percent.

U.S. gross domestic product grew in the third quarter for the first time in more than a year, expanding at a 3.5 percent pace from July through September, better than the economists' forecast of 3.3 percent and a drop of 0.7 percent in the previous quarter. However, a separate report showed that 530,000 workers filed claims for jobless benefits last week, more than the median forecast of 521,000 but fewer than 531,000 in previous week, signaling the job market is slow to heal even as growth picks up.

Earlier in the day, dollar and Japanese yen strengthened across the broad as stock markets in Asia tumbled following the decline in U.S. equity markets on Wednesday. The euro, sterling, Australian dollar and New Zealand dollar fell against the dollar to as low as 1.4683, 1.6335, 0.8942 and 0.7163 before rebounding on short-covering to as high as 1.4860, 1.6605, 0.9182 and 0.7369 respectively in New York session after the release of better-than-expected U.S. GDP data.

Elsewhere, rally in U.S. and European stock markets encouraged investors to return to riskier assets and eur/jpy, aud/jpy and gbp/jpy rebounded strongly from their session lows of 132.81, 80.91 and 147.69 to as high as 136.00, 84.03 and 151.63 respectively in New York session, while usd/jpy also surged from 90.23 to a high of 91.63 in U.S. afternoon before easing.

Data to be released on Friday include Japan BOJ rate decision, manufacturing PMI, unemployment rate, household spending, national CPI and Tokyo CPI, housing starts, German retail sales, U.K. Gfk survey and nationwide house prices, eurozone HICP flash Y/Y and unemployment, Switzerland KOF indicator, Canada GDP, and, U.S. PCE, personal income, personal spending, Chicago PMI and University of Michigan survey.