The single currency fell against the dollar from 1.6002 to 1.5860 on Wednesday after Luxembourg's Finance Minister Jean- Claude Juncker signaled concern that the pace of the U.S. currency's decline will take a toll on economic growth. The release of soft eurozone economic data also added pressure to the single currency.

Eurozone Manufacturing Purchasing Managers Index dropped to three-year low of 50.8 in April from 52.0 in March. German manufacturing PMI also declined 53.6 in April from 55.1 in March. Jean-Claude Juncker, the chairman of the euro zone finance ministers, said the euro's exchange rate is now excessively volatile. Comments by a member of European Central Bank Governing Council, Christian Noyer, dampened speculation of further interest rate increases by the bank. The implied yield of the three-month Euribor future for December rose to 4.60% as traders priced in the likelihood of an ECB rate increase. European policy makers have held interest rates steady since June 2007.

The British pound tumbled from 1.9975 to 1.9773 on Wednesday as a slide in British mortgage approvals to a record low in March underlined serious weakness in the housing market. The data suggested the Bank of England may continue cutting rates although the Bank of England minutes showed there was dissent within the central bank over its decision to cut interest rates by 25 basis points to 5.0% this month.

The greenback rebounded against the Japanese yen and Swiss franc from 102.75 to 103.79 and from 1.0023 to 1.0172 respectively. Australian dollar rallied to a 24-year high of 0.9541 against the U.S. currency after a government report showed inflation accelerated to 4.2% for the first time in seven years. The greenback rallied against Canadian dollar from 1.0061 to 1.0215 as Canada’s retail sales unexpectedly fell in February, adding speculation the central bank may cut interest rates further. The Bank of Canada lowered its key rate by a half-percentage point to 3% on Tuesday.

Thursday will see the release of Japan’s all industry index and CSPI, eurozone current account, German Ifo index, U.K. retail sales, U.S. durable goods, jobless claims and new home sales.