The dollar dropped to an eight-week low on Tuesday after a weak U.S. consumer confidence report, with investors cautious about a Federal Reserve meeting that could reinforce the view that interest rates in the world's largest economy might rise more gradually than initially thought.
The Fed is expected to keep interest rates on hold, but the main focus will be on the statement at the end of its policy meeting on Wednesday.
The dollar lost 4 percent in the past six weeks as expectations of a rate rise in June have faded after a run of soft data triggered worries that the U.S. economy is stalling. But many still expect the Fed to lift rates in September.
Tuesday's private-sector report showing an unexpected slump in U.S. consumer confidence in April further undermined the dollar.
The Conference Board said its index of consumer attitudes fell to 95.2 from an upwardly revised 101.4 in March. Economists were looking for a reading of 102.5.