Dollar Falls Before Fed as European Confidence Climbs

The dollar weakened to the lowest level since November 2011 versus the euro as European economic confidence increased and amid speculation the Federal Reserve will restate its commitment to monetary stimulus.

The greenback pared a gain against the yen as the U.S. economy unexpectedly contracted in the fourth quarter, restrained by the biggest plunge in defense spending in 40 years and dwindling inventories as household purchases picked up. The New Zealand dollar slid against all of its 16 most-traded counterparts amid bets the nation’s central bank will try to curb the currency’s strength.