The dollar slipped lower on Thursday after a bout of softer-than-expected U.S. labor market data, which dampened expectations for an accelerated pace for raising interest rates by the Federal Reserve.

The greenback was already on the defensive after Wednesday's issue of the Fed's policy minutes failed to provide a clear picture of future interest rate increases. The slide extended with Thursday's poor set of U.S. economic data.

Ahead of Friday's U.S. non-farm payrolls data, the ADP National Employment Report showed private sector payrolls rose by 158,000 jobs last month, lower than the 230,000 positions created in May and below market participants expectations for a gain of 185,000.

In a separate report, the Labor Department said initial claims for state unemployment benefits increased 4,000 to a seasonally-adjusted 248,000 for the week ended July 1. It was the third straight weekly increase in claims.

The U.S. services sector index, released by the Institute for Supply Management on Thursday, rose to 57.4 in June, compared with a forecast of 56.5. The employment index, however, fell to 55.8, compared with 57.8 in May, suggesting a cooling labor market. A reading above 50 indicates expansion.

EUR/USD rose to 1.1424 and USD/JPY backed off to 112.89. GBP/USD was more than 0.30 percent to 1.2983.