The greenback fell on Tuesday as growing optimism that the global recession is easing dented the greenback’s safe haven appeal. In late New York trading, the ICE future dollar index, which measures the dollar’s strength against a basket of six other major currencies, dropped 0.59 percent to trade at around 82.356, while the U.S. dollar tumbled to as low as 96.11 versus the Japanese yen and 1.1004 against the Swiss franc.

The single currency extended gains versus the dollar after comments by European Central Bank Governing Council member Axel Weber who said there is no need for the ECB to expand its asset purchase program into other sorts of private debt at present. The euro surged to a seven-week high of 1.3708 versus the greenback and was trading at around 1.3650 in late New York session.

The British pound strengthened against the dollar and euro as stronger-than-expected U.K. retail sales, housing market and industrial production data pushed sterling up. The pound rose to a four-month high against the dollar to 1.5354 in earlier session while it touched an intra-day high of 0.8915 versus the single currency before stabilising. Earlier in the day, data from Britain showed that U.K.’s housing slump eased in April (RICS house prices fell 59.9% last month versus a drop of 73.1% in March) and manufacturing shrank at the slowest pace in more than a year (declined 0.1% in March versus a drop of 0.9% in previous month).

On the data front, the U.S. trade deficit widened in March for the first time in eight months as the global economic slump pushed exports to the lowest level in more than two years. The gap expanded 5.5 percent to $27.6 billion, smaller than economists’ forecast of 29.0 billion and compared to a nine-year low of $26.1 billion in February. Imports also decreased as a drop in demand for industrial supplies such as natural gas and steel offset an increase in oil.

Economic data releases on Wednesday include Japan current account, economic watch DI and machine tool orders, U.K. BOE quarterly inflation report, average earnings, Claimant count and ILO unemployment, eurozone industrial production, and U.S. import price, retail sales and business inventories.