Fading worries over a potential swine-flu pandemic and nervousness ahead of the conclusion of the meeting of Federal Reserve policy makers left the U.S. dollar under pressure versus most major rivals Wednesday.
The U.S. currency stayed lower after the Commerce Department said the world's largest economy shrunk 6.1% in the first quarter, far more than economists had been bracing for. See more on GDP.
On Wednesday, the dollar index , a measure of the greenback against a trade-weighted basket of currencies, fell to 84.642, down from 85.177 in North American trading late Tuesday.
The euro rose to $1.3234, up from $1.3141 late Tuesday, helped as the European Commission's economic-sentiment indicator for the 16-nation euro zone rebounded more than predicted to in April.
Later Wednesday, Federal Reserve policy makers will announce their decision on monetary policy.
"With policy rates effectively at zero and given the announcement of the Treasury purchase plan last month, the upsizing of the [government-sponsored-enterprise mortgage-backed securities] and debt-purchase program, as well as the expansion of the TALF to legacy assets, it is hard to imagine anything new coming on the policy front," wrote economists at RDQ Economics in New York. Read about the Fed meeting.
Analysts said the swine-flu outbreak still has the potential to affect markets, however. See more on swine flu.
The Japanese yen, which had been the top beneficiary of safe-haven flows on worries surrounding the disease's impact, was also on the retreat. The dollar gained ground versus the Japanese currency to trade at 96.83 yen, up from 96.36 yen late Tuesday.
