The greenback struggled against the major currencies on Thursday, with the exception of the Australian and Canadian dollars. The dollar fell by nearly 1.2% to a two-month low against the euro to relinquish the 1.29-level while shedding around 1.1% versus the Japanese yen to slump to a 7-month low at 87.25. The winning streak in the US equity bourses ended at seven consecutive sessions, with the Dow Jones, S&P 500 and the Nasdaq all trading lower by 0.5%. Crude oil also struggled lower, losing almost 0.9% to $76.43-per barrel.

Data released from China overnight revealed that the government's efforts to tap the brakes on a potentially overheating economy have helped temper growth and inflationary pressures. The economy expanded by 10.3% in Q2, growing at a slower pace than forecast and easing from 11.9% from a year earlier. Inflationary pressure also moderated, with the consumer price index lower to 2.9% and the producer price index drifting to 6.4%. Retail sales and industrial production for June also printed softer than consensus estimates, at 18.3% and 13.7%, respectively. The incoming data will continue to be closely monitored to gauge whether the government can successfully engineer a soft landing without derailing the nascent global economic recovery.

Although the barrage of US economic data released earlier in the session was mixed, it further raises concerns for a possible double-dip recession. The better-than-forecast data included weekly jobless claims, which declined to 429k from 458k in the previous week and industrial production, edging up by 0.1% in June compared with a 1.3% increase from May. However, the Philadelphia Fed index missed calls for an improvement to 10.0, instead dipping to its lowest level since August 2009 at 5.1 in July versus a reading of 8.0 from June. The Empire Fed manufacturing survey also fell by more than expected, printing at its lowest levels since December at 5.08 versus 19.57 in the previous month.

The calendar for Friday will feature the June consumer price index, the May net TIC flows and the July preliminary University of Michigan consumer confidence survey.