The dollar fell against the euro and yen Wednesday after a U.S. government report showed the trade deficit remained stubbornly high. The larger-than-expected deficit fueled concerns about the dollar’s long-term value. The Commerce Department reported that the trade gap stood at $63.8 billion in April, exceeding economists’ forecasts.

The euro rose to $1.2880 in late New York trading, up from $1.2821 late Tuesday. The dollar also weakened against the Japanese yen, falling to 115.63 yen from 116.31 yen. Analysts said the trade deficit data reinforced expectations that the Federal Reserve may slow down its pace of interest rate hikes.

A slower pace of rate increases could make the dollar less attractive to foreign investors seeking higher returns. The trade deficit has been a persistent drag on the dollar, as it reflects the country’s reliance on foreign capital to finance its spending. Economists warn that a continued large trade deficit could eventually lead to a sharp decline in the dollar’s value.