Most currencies traded within tight ranges, although the New Zealand dollar fell after weak jobs data raised expectations of a central bank rate cut.

Traders scaled back their exposure to the greenback before the end of the Federal Reserve's two-day policy meeting.

Trading was thin in much of Asia and Europe in observance of the May Day holiday.

"It's a combination of a thin markets and people waiting on what the Fed does," said Chris Gaffney, president of world markets at TIAA Bank in St. Louis.

The Fed meeting comes after strong US economic data last month pushed the dollar to a two-year high.

Hopes about the US economy picking up from a deceleration in late 2018, faded a bit on Wednesday as the Institute for Supply Management said its closely watched barometer on the US factory sector deteriorated to a 2-1/2 year low in April.

The surprise downturn in manufacturing activity was offset by a report from ADP that US companies added 275,000 workers last month, the most in nine months.

"It's a slowdown in manufacturing, but the US economy is moving forward," Gaffney said.

At 11:03 a.m. (1503 GMT), the index that tracks the dollar against a basket of currencies was 0.213pc lower at

97.3.

It neared two-year peak last week, rising 0.36pc in April.

Some of the dollar's gains last month came against the euro, the result of growing concerns about a slowdown in the euro zone's economy.

However, relatively strong economic growth data in the euro zone on Tuesday prompted some short covering from hedge funds that have been betting against the single currency, lifting the euro above $1.12.

The euro added to those gains on Wednesday, hitting a one-week high at 1.1248. It was last up  0.26pc at $1.1245.

The day's big mover was the New Zealand dollar, which fell half a percent after data showed employment unexpectedly fell in the March quarter, although the jobless rate dropped to 4.2 percent.

Markets responded by betting that a rate cut was more likely.

The Reserve Bank of New Zealand, which holds a policy meeting next week, has already said its next move was likely to be down.