In London trade, the European single currency dropped to $1.3955 from $1.3996 in New York late Tuesday.
The dollar slipped to 80.67 yen from 80.73 yen on Tuesday.
Portugal raised a fresh one billion euros ($1.39 billion) in a short-dated bond sale Wednesday but had to pay investors much higher rates of return after Moody’s downgrade.
Moody’s Investors Service slashed Portugal’s debt rating late Tuesday to A3 from A1, and gave it a negative outlook, citing concerns the government would not be able to balance its books amid “subdued growth prospects.”
The dollar meanwhile was strong after the US Federal Reserve maintained ultra-low interest rates even as it gave a more positive outlook for the economy.
The Fed’s actions supported the dollar, said David Forrester, currency strategist for Barclays Capital in Singapore.
“The main reason for that is interest rates … It’s a boost for the dollar from the” Fed, he told AFP.
Fed policymakers also left in place $600 billion stimulus spending as they noted easing unemployment, a pick-up in consumer spending and growing business optimism.
“The economic recovery is on a firmer footing and overall conditions in the labour market appear to be improving gradually,” it said.
Meanwhile, the Bank of Japan on Wednesday pumped another 3.5 trillion yen ($43.3 billion) into the financial system on top of 23 trillion yen in funds over the past two days to soothe markets and ensure firms can access cash.
Tokyo shares closed up 5.68 percent on Wednesday on bargain hunting following its biggest two-day sell-off for 24 years the day before on fears of a nuclear meltdown after a huge earthquake and tsunami.
A fresh fire broke out at a quake-damaged Japanese atomic power plant early Wednesday, compounding Japan’s nuclear crisis and efforts to deal with the disaster’s aftermath.
In London trading on Wednesday, the euro changed hands at $1.3955 against $1.3996 in New York late Tuesday, at 112.58 yen (113.01), ÂŁ0.8690 (0.8702) and 1.2802 Swiss francs (1.2826).
The dollar stood at 80.67 yen (80.73) and 0.9173 Swiss francs (0.9161).
The pound was at $1.6058 (1.6082).
On the London Bullion Market, the price of gold dipped to $1,398.88 an ounce from $1,400.50 late Tuesday.
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