The euro fell to a fresh 16-month low against the dollar on fears that Germany, Europe's largest economy, may be stalling.
The German government estimated that the country's economy contracted at an annual rate of 0.25 percent in the last quarter of 2011. The exact figure will be released next month and could be revised.
The euro dropped as low as $1.2661 Wednesday afternoon, its lowest point since Sept. 10, 2010. It was worth $1.2790 late Tuesday.
The dollar also rallied against most other currencies.
The British pound fell to $1.5325 from $1.5486. The dollar rose to 76.90 Japanese yen from 76.82 yen, to 0.9511 Swiss franc from 0.9485 Swiss franc and to 1.0193 Canadian dollar from 1.0159 Canadian dollar.