The dollar fell to a five-week low against a basket of currencies on Wednesday as traders reduced bets of an imminent U.S. interest rate increase following a poor jobs report and perceived dovish comments from the Federal Reserve chief.
The euro reached a near four-week peak against the greenback even with German Bund yields posting record lows as the European Central Bank began buying corporate debt for its bond purchase program in a bid to boost the euro zone economy.
Stronger-than-expected Chinese import data boosted the Australian and New Zealand dollars and other commodity-sensitive currencies versus the greenback.
"With Fed rate expectations collapsing precipitously over the past week thanks to Friday's abhorrent May labor market report, investors have been quick to recalibrate to the reality that the Fed liftoff isn't coming until at least September, but more likely December," said Christopher Vecchio, currency analyst at DailyFX in New York.
On Monday, Fed Chair Janet Yellen gave an upbeat view on the U.S. economy but refrained from offering a possible timing on a rate increase.
U.S. interest rate futures implied traders saw nearly no chance the Fed would increase rates at its policy meeting next week, according to CME Group's FedWatch.
The dollar index, which tracks the greenback against six currencies, shed 0.24 percent at 93.601. It touched 93.425 earlier on Wednesday, the lowest since May 6.
The euro strengthened to $1.1397, up 0.4 percent on the day . Its gain was limited by persistent worries that the single currency is likely to struggle if Britain votes on June 23 to leave the European Union.
"It could be internationally destabilizing," TD Securities' New York-based senior FX strategist Mazen Issa said of a "Brexit." "The market is too complacent. It (sterling) should be weaker," he said.
The pound was down 0.25 percent at $1.4508, erasing earlier gains, while the euro rose 0.55 percent to 78.52 pence .
Meanwhile, the greenback weakened 0.4 percent to 106.86 yen , holding above a 4-week low set earlier this week. It pared initial losses after data showed that China's imports beat forecasts in May, adding to hopes that the world's second-biggest economy may be stabilizing.
The encouraging Chinese data spurred buying of oil, metal and other commodities, which in turn lifted the currencies of those exporting countries.
The Australian dollar approached a five-week peak at $0.7473, up 0.2 percent on the day, while the New Zealand dollar rose 0.5 percent at $0.7015, not far below a five-week high set earlier on Wednesday.