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HONG KONG - The U.S. dollar fell to a four-month low on Wednesday as optimism about a global recovery and concerns about U.S. fiscal health reduced its safe haven appeal, while oil held near $60 a barrel on hopes for more energy demand as inventories tighten.

Stocks markets in Japan, South Korea and Taiwan gained but they slipped in Australia and Hong Kong as investors bought back some defensive sectors after a solid rally in the last few months left them wondering whether it would last.

Adding to souring sentiment on the U.S. dollar, a commentary in the Financial Times about the risk of the U.S. government losing its top credit rating touched a nerve among traders.

The latest bout of dollar weakness has coincided with surging global equity markets as investors large and small begin to put money back to work that had been locked safely away in dollar-denominated assets.

"The decline in the U.S. dollar that we have seen over the past few weeks coupled with rising stock markets seems reflective of an asset allocation shift out of cash into equities," Ashley Davies, currency strategist with UBS in Singapore, said in a note to clients.

Davies added the asset shift could pick up speed if investors bail out of bonds, worried about upcoming supply, and skepticism about government projections about cutting budget deficits.

The ICE Futures U.S. dollar index was down 0.25 percent <.DXY> after earlier plumbing its lowest level since Jan 9. The index has fallen 8.1 percent since March 9, when a global stock market rally started.

The euro rose to its highest point against the dollar in seven weeks at around $1.3722, before easing to $1.3680, up 0.3 percent on the day.

U.S. crude for June delivery rose 1.3 percent to $59.59 a barrel after briefly rising on Tuesday above $60, its highest level since November 2008.

An unexpectedly big draw down of U.S. inventories last week, reported by the American Petroleum Institute on Tuesday, helped buoy bullish sentiment in oil.