The euro was slightly lower against the dollar on Wednesday, as Moody’s downgraded Portugal’s long-term government bond ratings.

EUR/USD hit a low of 1.3959 during early European trade, before consolidating at 1.3976.

The pair is likely to find support at Tuesday’s low at 1.3854 and resistance at 1.4035, a 4-month high reached on March 7.

Moody's downgraded Portugal rating by two notches to A3, saying the country will continue to struggle from low growth rates and funding problems for years, despite access to the European Union’s bailout fund.

Accessing the European Financial Stability Facility may lead to a reduction in financing costs, but questions would remain as to when the government would be able to re-access the capital markets and on what terms, Moody's said.

However, dollar edged higher against the Japanese yen on Wednesday in Asia trading, as risk sentiments recovered mildly from nuclear crisis in Japan.

USD/JPY pair gained 0.27 percent to hit 80.73 during late Asian trade.

The dollar gained following the Bank of Japan’s (BoJ) pumping of additional 13.8 trillion yen on Wednesday, to stabilize the financial system in the wake of earthquake. The total liquidity injection by BoJ stood at 55.6 trillion yen since March 14.

Japanese Nikkei recovered 5.68 percent to close above 9000 level, after a record selloff on Tuesday.

The yen was also lower against the euro, with EUR/JPY gaining 0.13 percent to hit 113.14.