The Dollar declined versus most of its major currency counterparts on Wednesday after mixed economic data showed that while the U.S economy is stabilizing, it is still very shaky. The Dollar index fell to 76.744, down from 77.085 in North America late Tuesday.

The greenback pared losses after a weaker than expected Chicago PMI report was released; however, data overseas served to reinforce growing optimism over the global economic outlook, reducing investor desire for the relative safety of the U.S. currency. The greenback extended a two-quarter slide against the EUR after a report showed China's manufacturing sector grew for a fourth consecutive month.

A heavy news day is expected today from the U.S with the Unemployment Claims due to be released at 12:30 GMT and the ISM Manufacturing PMI and Pending Home Sales due to be released at 14:00 GMT. Furthermore, Fed Chairman Ben Bernanke is due to testify at 13:00 GMT. This will likely result in a very volatile trading day for the Dollar, particularly ahead of the highly anticipated Non-Farm Employment Change report due tomorrow.