The dollar slipped against the euro and a basket of major currencies on Wednesday, as investors shrugged off a mostly strong batch of US data and focused on a Federal Reserve meeting expected to end in an interest rate cut.
The dollar had gained after a stronger-than expected US private-sector jobs report and advanced estimates showing the economy grew at its fastest pace in the third quarter since the beginning of last year.
But gains reversed on nervousness about the Fed's decision and a subpar reading of October business activity in the US Midwest.
"We had a weak Chicago PMI number and that really keeps the bearish dollar trend alive ... given a risk of a further downturn and a weakening economy into 2008," said Win Thin, currency strategist at Brown Brothers Harriman in New York.
"But I really don't think anyone wants to put on huge positions ahead of the FOMC (Federal Open Market Committee meeting ending) this afternoon," Win said. "That's why, we're seeing very limited trading right now."
Overall, today's US data did little to alter expectations that Fed would cut interest rates later in the day. The central bank is widely seen cutting the federal funds rate by a quarter percentage point to 4.5 percent. Some investors think the Fed bank could signal additional rate cuts in its post-decision statement.
Last month, the Fed cut by an aggressive half-point.
By midmorning trading, the euro was up 0.1 per cent against the dollar at $1.4449. It earlier rose to a lifetime peak of $1.4467, according to Reuters data.
Against the yen, the dollar rose 0.7 per cent to 115.42. The yen was also hurt by a monetary policy report from the Bank of Japan, which analysts said confirmed it was in no hurry to raise rates from the current 0.5 per cent.
The dollar index, which tracks the US currency's performance against a basket of six major currencies, was nearly flat at 76.763, recovering from a record low of 76.621 hit earlier in the session.