The dollar fell to a four-week low against the yen and a one-week trough versus the euro on Thursday, as investors fretted that weakness in both US manufacturing and service sectors could lead to a slowdown in the world's largest economy. "It appears that the US is now catching down with rest of the G10," said Ranko Berich, head of market analysis at Monex Europe in London.

Data on Thursday showed that the Institute for Supply Management's services sector index fell to 52.6 in September from 56.4 the previous month. The survey's employment index slid to 50.4 from 53.1 in August. September's employment index was the lowest since February 2014. In midmorning trading, the dollar was down 0.6% against the yen, at 106.52 yen, falling to its lowest level in four weeks at 108.49 right after the ISM non-manufacturing report.

The dollar index fell 0.3% to 98.74, with the euro up 0.2% at $1.0983. The euro rose to a one-week high of $1.0999 after the data. Elsewhere, sterling rallied 0.9% against the dollar to $1.24 after the head of a group of euroskeptic lawmakers in Prime Minister Boris Johnson's Conservative Party said on Thursday the government's latest Brexit proposals offered the possibility of a "tolerable deal".

Copyright Reuters, 2019