The U.S. dollar pushed higher Wednesday as a renewed decline in U.S. equity markets increased safe-haven flows to the greenback, strategists said.
Weak economic data also weighed on the euro, Japanese yen and British pound.
The dollar index a measure of the greenback against a trade-weighted basket of six major currencies, was slightly lower at 87.766 compared with 86.781 in late North American activity Tuesday.
The euro slipped to $1.2708 versus the dollar from $1.2868.
The dollar fetched 96.93 yen, compared to 96.73 yen late Tuesday. The dollar had earlier hit a three-month high at 97.30 yen, according to FactSet.
The British pound slipped 1.6% versus the dollar to $1.4284.
The dollar has been mixed earlier as Asian and European equities gained, taking their cue from a late Wall Street rally. Overall sentiment was further boosted by President Obama's address before a joint session of Congress. See story on Obama's speech.
The moves initially left the dollar on the defensive against most major currencies, except for the broadly weaker Japanese yen.
The yen had tumbled to new lows after government data showed Japanese exports posted a record fall in January, pushing the trade deficit to a record 952.6 billion yen ($9.92 billion). See full story.
"The fundamental case for a weaker Japanese yen has become more pressing with Japan reporting its fourth monthly trade deficit in a row, suggesting that the current-account surplus will melt down further, reducing commercial yen buying needs," wrote strategists at BNP Paribas. "We firmly underline our bearish JPY call and suggest using today's likely (dollar/yen) downward correction to buy into weakness."
Germany on Wednesday said fourth-quarter gross domestic product posted a 2.1% fall, matching a previous estimate and matching economists' expectations.
The euro zone's largest economy has also seen exports plunge amid a massive global slowdown.
The euro was also under pressure Moody's Investors Service lowered its outlook on A1-rated Greece to stable from positive.
"The downgrade reflects a deeper problem in the euro zone," said strategists at brown Brothers Harriman. "Greece is suffering from an inability to compete not just in the euro zone but also outside the euro zone."
The U.K. Office for National Statistics confirmed an earlier estimate pegging the quarterly decline in British GDP over the final three months of 2008 at 1.5% -- the steepest fall since 1980. The third quarter was downwardly revised to show a 0.7% contraction following an earlier estimate of a 0.6% fall.
The data showed a 0.7% quarterly fall in real consumer spending and a 2.3% fall in investment.
