The U.S. dollar traded lower against the most major currencies after the mostly positive U.S. economic data. Market participants are awaiting a speech by the Federal Reserve Chair Janet Yellen in Jackson Hole on Friday.

The number of initial jobless claims in the week ending August 16 in the U.S. fell by 14,000 to 298,000 from 312,000 in the previous week. The previous week's figure was revised from 311,000. Analysts had expected number of initial jobless claims to decrease by 13,000 to 299,000.

The U.S. preliminary manufacturing purchasing managers' index (PMI) rose to 58.0 in August from 55.8 in July, beating expectations for a decline to 55.7.

The Federal Reserve Bank of Philadelphia's manufacturing index climbed to 28.0 in August from 23.9 in July, beating expectations for a drop to 20.3.

The existing home sales in the U.S. rose 2.4% to 5.15 million units in July from 5.03 million units in June. June's figure was revised down from 5.04 million units. Analysts had expected a decrease to 5.01 million units in July.

The euro traded higher against the U.S. dollar. Eurozone's preliminary manufacturing purchasing managers' index (PMI) declined to 50.8 in August from 51.8 in July, missing expectations for a fall to 51.4.

Eurozone's preliminary services purchasing managers' index (PMI) fell to 53.5 in August from 54.2 in July, missing expectations for a decline to 53.6.

Germany's preliminary manufacturing purchasing managers' index (PMI) decreased to 52.0 in August from 52.4 in July, beating expectations for a fall to 51.8.

Germanys' preliminary services purchasing managers' index (PMI) fell to 56.4 in August from 56.7 in July, beating expectations for a decline to 55.5.

French preliminary manufacturing purchasing managers' index (PMI) declined to 46.5 in August from 47.8 in July, missing forecasts of a rise to 47.9.

French preliminary services purchasing managers' index (PMI) rose to 51.1 in August from 50.4 in July, beating expectations for a fall to 50.3.

The British pound traded slightly higher against the U.S. UK retail sales increased 0.1% in July, missing expectations for a 0.4% rise, after a 0.2% gain in June. June's figure was revised up from a 0.1% increase.

On a yearly basis, U.K. retail sales climbed 2.6% in July, after a 3.4% rise. June's figure was revised down from a 3.6% gain.

The U.K. public sector net borrowing posted a deficit of £1.1 billion in July, after a surplus of £9.79 billion in June. June's figure was revised from a surplus of £9.51 billion. Analysts had expected a surplus of £10.1 billion.

The Swiss franc traded higher against the U.S. dollar. Switzerland's trade surplus rose to 3.98 billion Swiss francs in July from a surplus 1.41 billion Swiss francs in June, exceeding expectations for an increase to a surplus of 1.91 billion Swiss francs. June's figure was revised up from a surplus of 1.38 billion Swiss francs.

The New Zealand dollar traded lower against the U.S dollar due to the strong U.S. currency and the weaker-than-expected economic data from China and New Zealand, but later recovered its losses.

China's preliminary HSBC manufacturing purchasing managers' index dropped to 50.3 in August from 51.7 in July, missing expectations for a decline to 51.5.

China is New Zealand's second biggest export partner.

Credit card spending in New Zealand rose 4.5% in July, after a 6.0% gain in June. June's figure was revised down from a 7.0% increase.

The Australian dollar traded lower against the U.S. dollar due to the strong U.S. currency and the weaker-than-expected economic data from China, but later recovered its losses.

The Conference Board released its leading index for Australia. The index climbed 0.4% in June, after a 0.2% rise in May.

The Japanese yen traded slightly higher against the U.S. dollar.

Japan's preliminary manufacturing purchasing managers' index rose to 52.4 in August from 50.5 in July, exceeding expectations for an increase to 51.5.