The US ISM manufacturing PMI tumbled to 54.1 in December from 59.3, missing estimates of 57.7.
As of 03:06 GMT, the dollar index slid 0.41% to 96.32 off June 2017 highs for the ninth session out of 15, with an intraday low at 96.27, and a high at 96.75.
ISM manufacturing prices fell as well sharply to 54.9 from 60.7, missing expectations of 57.9.
The new orders gauge in the same survey fell to 51.1 from 62.1, while production fell to 54.3 from 60.6, as employment fell to 56.2 from 58.4.
The inventory gauge fell to 51.2 from 52.9, as new export orders rose to 52.8 from 52.2, while imports receded to 52.7 from 53.6.
50 separates growth from contraction in PMI reading, with a reading above 50 indicating expansion and vice versa.