The dollar experienced a widespread decline against major currencies on Wednesday, fueled by persistent worries regarding the U.S. economic trajectory. The euro climbed to a session high of $1.3046 before settling around $1.3030 in late New York trading, marking a 0.3% increase.

Against the Japanese yen, the dollar dipped to 120.46, a level not seen since mid-December. It later recovered slightly to 120.74, still reflecting a 0.4% decrease. The British pound also gained ground, reaching $1.9569, its highest point since August 1992.

Analysts attribute the dollar’s weakness to growing speculation that the Federal Reserve may be compelled to lower interest rates to stimulate the U.S. economy. Recent economic data has painted a mixed picture, adding to the uncertainty. Market participants are keenly awaiting the release of upcoming inflation and employment figures for further insights into the Fed’s potential policy moves.

“The market is clearly pricing in a greater chance of a rate cut,” noted [Analyst Name], chief currency strategist at [Firm Name]. “The dollar is likely to remain under pressure until we see more definitive evidence of economic stabilization.”

Beyond interest rate expectations, the dollar is also being weighed down by the substantial U.S. current account deficit, which continues to require significant capital inflows to finance it. Any perceived reduction in the attractiveness of U.S. assets could further exacerbate the dollar’s vulnerability.