The British pound also saw profit-taking, but it is still on track to lead gains against the dollar in February as fears about a no-deal Brexit fade.
“The weak Chinese PMI data and concerns about the progress of U.S.-China trade talks are weighing on risk appetite, and that is pushing the franc higher,” said Esther Maria Reichelt, an FX strategist at Commerzbank.
Factory activity in China reached a three-year low in February as export orders fell at the fastest pace since the global financial crisis, more evidence of an economy facing weak demand at home and abroad.
Sentiment was also hurt by U.S. Trade Representative Robert Lighthizer’s comment that it was too early to predict an outcome in trade talks between Washington and Beijing.
The Swiss franc rallied 0.37 percent against the dollar to 0.9977 and the Japanese yen gained 0.41 percent to 111.44 yen.
Against a basket of its rivals, the dollar rose 0.04 percent to 96.18. Traders said some of its weakness was caused by month-end selling after a strong month for risky assets.
Sterling edged lower after reaching a seven-month high on Wednesday as traders bet Britain’s departure from the European Union would be delayed.
“I think we had nothing significant from last night and we’re back into another hiatus until mid-March, so there is some bit of profit taking,” said John Marley, a senior currency consultant at SmartCurrencyBusiness.