The dollar slipped on Wednesday at the start of the second quarter as disappointing data on U.S. manufacturing and jobs growth raised bets the Federal Reserve might refrain from raising interest rates until late 2015 at the earliest.
The soft readings reinforced the notion that the recent surge in the greenback has hurt exporters and dragged on the economy, which would worry Fed policymakers.
Payroll processor ADP said U.S. companies added 189,000 workers in March, the fewest in 14 months, while the Institute for Supply Management said its index on U.S. factory activity fell to a lower-than-expected 51.5 last month.
"There's more uncertainty about the timing and pace of policy normalization from the Fed," said Eric Viloria, currency strategist at Wells Fargo Securities in New York. "We saw a negative reaction (from the data) that contributed to the weakness in the dollar."
After a tumultuous couple of weeks for many major currencies, volumes have eased and traders said the market would lighten further ahead of Friday's U.S. nonfarm payrolls numbers and the Easter holiday weekend.
Most U.S. markets will be closed on Friday, while a number of major European markets will shut on Friday and reopen on Tuesday.