The U.S. dollar dropped against most major currencies Thursday as a partial U.S. government shutdown raised speculations that the Federal Reserve may delay tapering.

The impasse entered into a third day on Thursday, after a White House meeting between U.S. President Barack Obama and congressional leaders on Wednesday afternoon ended with little sign of compromise.

Obama said Wednesday that it is important for Wall Street to recognize that this is going to have a profound impact on the economy.

Concerns grow that the government shutdown and a failure to raise the debt ceiling would hold down the U.S. economic growth, leading to a delay in Fed's retreat from its bond-buying program, which exerted downward pressure on the dollar.

Economic data of the country came in mixed. The number of Americans who initially applied for jobless benefits last week rose 1,000 to 308,000 from the previous week, the Labor Department said Thursday, less than the market consensus.

However, U.S. economic activity index in the non-manufacturing sector registered 54.4 in September, lower than August's reading of 58.6 percent, said the Institute for Supply Management.

The euro strengthened against the dollar after London-based Markit Economics reported on Thursday that the purchasing managers index of the service sector in the euro zone rose to 52.2 in September, up from 50.7 in August.

In late New York trading, the euro rose to 1.3621 U.S. dollars from 1.3581 dollars of the previous session, and the British pound decreased to 1.6159 dollars from 1.6221 dollars. The Australian dollar declined to 0.9402 dollar from 0.9385 dollar.

The dollar bought 97.23 Japanese yen, lower than 97.39 yen of the previous session. The dollar moved down to 0.8995 Swiss franc from 0.9028, and it went down to 1.0322 Canadian dollars from 1. 0332.