The dollar fell against the euro on Wednesday as risk appetite picked up.

Strong import data from China, robust manufacturing data in France and Italy and easing concern about Greece's debt crisis encouraged demand for the euro. The euro rose to 0.4% to $1.3649.

The yen weakened against major currencies as investors turned to higher yielding currencies on hopes about the global economic recovery.

Jitters about deflation in Japan also hampered the yen's progress after Wednesday's economic data. The dollar rose 0.6% against the yen at 90.51 yen.

The dollar index, which measures the currency against a basket of six others, eased to 80.484 from 80.580 the previous session.

Sterling fell 0.2% to $1.4967 as gloom about a potential hung parliament and disappointment about the economic recovery lingers.

The pound stumbled to a one week low of $1.4873 after data showed Britain's manufacturers had it tougher than expected in January as unusually bad weather stifled output. The euro rose 0.6% to 91.19p.

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