The US dollar swung lower against the euro but rose against the yen as financial markets brightened on signs of a big Chinese economic stimulus that capped the greenback's recent fear-driven gains.
The euro rose to 1.2657 dollars at 2200 GMT against 1.2556 dollars on Tuesday after falling at one point to 1.2457 dollars, a three-month low.
The dollar meanwhile edged up to 98.98 yen from 98.15 on Tuesday.
The recent gains for the dollar as well as the yen have been largely driven by worries about a deeper economic slide that has prompted a move into safe-haven assets.
Sacha Tihanyi at Scotia Capital said news of a likely Chinese economic stimulus that could help the global economy "has helped set a more positive tone" in the market.
Analysts largely looked past a report that the US private sector shed a greater-than-expected 697,000 jobs in February as employers slashed payrolls to cope with the shrinking economy. Also having little impact was a grim Federal Reserve Beige Book survey on the US economy through February.
"The US dollar is continuing to give up ground against most major and emerging currencies as tensions continue to ease on encouraging economic news from China and a possible enlargement of the Chinese stimulus package," said analysts at Brown Brothers Harriman.
"The weak US ADP jobs report and a dismal Beige Book pointing to broad-based economic deterioration with temp staffing dismal, a sign Friday's US jobs data could be even worse than the 650,000 loss expected, have not boosted tensions."
The euro began the day on the back foot as investors, rattled by gloomy global economic prospects and crumbling stock prices, bought the dollar, seen as a refuge currency in times of trouble.
In addition, the single currency suffered from widespread forecasts of another eurozone rate cut on Thursday by the European Central Bank.
The ECB is expected to lower its benchmark interest rate by half a point to an all-time low of 1.50 percent as it struggles to remedy a crippling recession in the 16-member eurozone.
Investors are also looking for a rate cut by the Bank of England.
The yen's fall against the dollar came as Japan's opposition leader Ichiro Ozawa, seen as a potential future prime minister, dismissed calls to resign after a close aide was arrested in a fundraising scandal.
In late New York trade, the dollar stood at 1.1683 Swiss francs after 1.1758 on Tuesday.
The pound was at 1.4195 dollars after 1.4050.
"Sterling is one of the better performers today," according to Scotia Capital's Tihanyi, who nonetheless cautioned that the currency could be volatile if the Bank of England takes extraordinary moves such as quantitative easing to boost its economy.
"With the BoE likely to drop the quantitative easing bomb tomorrow, we would be nervous if sterling got too far ahead," the analyst said.
The euro rose to 1.2657 dollars at 2200 GMT against 1.2556 dollars on Tuesday after falling at one point to 1.2457 dollars, a three-month low.
The dollar meanwhile edged up to 98.98 yen from 98.15 on Tuesday.
The recent gains for the dollar as well as the yen have been largely driven by worries about a deeper economic slide that has prompted a move into safe-haven assets.
Sacha Tihanyi at Scotia Capital said news of a likely Chinese economic stimulus that could help the global economy "has helped set a more positive tone" in the market.
Analysts largely looked past a report that the US private sector shed a greater-than-expected 697,000 jobs in February as employers slashed payrolls to cope with the shrinking economy. Also having little impact was a grim Federal Reserve Beige Book survey on the US economy through February.
"The US dollar is continuing to give up ground against most major and emerging currencies as tensions continue to ease on encouraging economic news from China and a possible enlargement of the Chinese stimulus package," said analysts at Brown Brothers Harriman.
"The weak US ADP jobs report and a dismal Beige Book pointing to broad-based economic deterioration with temp staffing dismal, a sign Friday's US jobs data could be even worse than the 650,000 loss expected, have not boosted tensions."
The euro began the day on the back foot as investors, rattled by gloomy global economic prospects and crumbling stock prices, bought the dollar, seen as a refuge currency in times of trouble.
In addition, the single currency suffered from widespread forecasts of another eurozone rate cut on Thursday by the European Central Bank.
The ECB is expected to lower its benchmark interest rate by half a point to an all-time low of 1.50 percent as it struggles to remedy a crippling recession in the 16-member eurozone.
Investors are also looking for a rate cut by the Bank of England.
The yen's fall against the dollar came as Japan's opposition leader Ichiro Ozawa, seen as a potential future prime minister, dismissed calls to resign after a close aide was arrested in a fundraising scandal.
In late New York trade, the dollar stood at 1.1683 Swiss francs after 1.1758 on Tuesday.
The pound was at 1.4195 dollars after 1.4050.
"Sterling is one of the better performers today," according to Scotia Capital's Tihanyi, who nonetheless cautioned that the currency could be volatile if the Bank of England takes extraordinary moves such as quantitative easing to boost its economy.
"With the BoE likely to drop the quantitative easing bomb tomorrow, we would be nervous if sterling got too far ahead," the analyst said.
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