The U.S dollar traded near a 14-month low against the EUR as signs that the global economy is recovering spurred demand for higher-yielding assets. The greenback declined to the highest since August 2008 to $1.4828, down from $1.4786 in late trading.

The USD slumped versus major counterparts on Tuesday as investors favored gold, often viewed as the most stable commodity. With the greenback's losses softened by a drop in U.S. stocks amid concerns about the strength of the economy's recovery, analysts have said that traders look to gold as a hedge against inflation and market volatility. Following the enormous bailout packages of 2008-09, inflation has become a real concern. As a result, gold has become largely important as a hedge in today's market.

Analysts also noted reports about what central banks are doing with their reserves that indicate a shift away from the U.S. currency, confirming a long-standing fear in the market. The U.S dollar may decline further today before a government report forecast to show U.S. consumer prices gained last month, curbing demand for safe-haven assets.