The dollar retreated against the majors in New York after comments by European Central Bank policy maker Nout Wellink and climbing crude oil prices sent the greenback tumbling.
Greenback bulls suffered a setback after the ECB policy maker Nout Wellink stated that the Euro-Zone interest rates may rise in order to combat the inflation. Currently the inflation in the European Union is 2.00 percent, inline with the ECB target.
Another story was rallying commodity prices that gave the commodity block currency a significant boost as oil prices inched closer to $55 per barrel and copper prices reached a multi year high. The -CRB commodities index hit 313 today, a high not seen since 1981.
With no significant economic releases on the US calendar until Friday, the market is preparing for the release of the Trade Balance. The markets will closely scrutinize the Trade Deficit numbers, as it is one of the twin deficits currently contributing to the dollar weakness.
The US dollar was quoted at 1.3345-48 against the euro, 104.65-69 versus the Japanese yen and 1.9292-97 against the sterling at 22:30 GMT.
Wall Street stocks retreated after lackluster earnings guidance from Texas Instruments weighed on the rest of the semiconductor sector.
The NASDAQ Composite fell 0.4 percent to 2,081.40 the Standard and Poor's 500 index shed 0.3 percent to 1,221.84, and the Dow Jones Industrial Average slipped 0.1 percent to 10,928.80. Philadelphia Semiconductor index lost 0.8 percent to 437.89.
Semiconductors were in play today after Texas Instruments lowered its earnings guidance. TI shares fell 2.8 percent to $26.61. Intel, the world's biggest computer chip maker, slipped 0.1 percent to $24.96. Qualcomm retreated 0.7 percent to $37.12.
McDonalds shed 3.5 percent to $33.01 after the world's biggest fast food chain reported lower sales growth in February.
Kroger, the grocery chain, tumbled 4.5 percent to $16.92 after reporting wider than expected quarterly loss.
Sunoco, the oil group, rose 1.9 percent to $105.04 as oil prices rose above $54 per barrel.
The NYMEX crude oil futures contract for April delivery rallied 70 cents to $54.59 per barrel as traders speculated that OPEC will not intervene in the oil market when the organization meets next week in Iran. Gasoline futures contract for April delivery rose 3 cents to $1.5353 per gallon.
COMEX gold futures contract for April delivery gained $5.30 to $441.10 per ounce as the dollar fell sharply against the majors in New York. Copper futures for May delivery added 0.3 cents to $1.4995 a pound, the highest close in over 16 years as demand from China continues to drive the metal prices higher.
US Treasuries fell sharply as traders sold the notes on speculation that rising commodity prices will cause inflationary pressures. The 10 Year Treasury Note fell 1/2 to 96 15/16 pushing the yields up by 7 basis points to 4.38 percent. The 10 T-Note futures contract for June delivery lost .15 to 109-24.