Dollar Sinks on German Economic Report

The euro rose as high as $1.5709 in morning European trading, up from $1.5596 in New York late Tuesday.

Germany's Ifo institute reported that business confidence in Germany rose for a third consecutive month, defying economists' expectations of a decline.

The dollar already had been weighed down Tuesday by data showing that U.S. consumer confidence hit a five-year low, while a major housing index showed the steepest price decline in more than two decades.

Amid concern over the U.S. economic outlook, the Federal Reserve has cut its key interest rate six times since September while the European Central Bank, focusing on inflation risks, has left its rates unchanged.

Though lower interest rates can spark a nation's economy, they can weigh on its currency as traders transfer funds to countries where they can earn higher returns.

In other trading Wednesday, the British pound fell to $1.9960 from $2.000. The dollar fell back under 100 Japanese yen, declining to 99.45 yen from Tuesday's level of 101.01 yen.