The dollar fell to a one-month low on Wednesday, undermined by weaker-than-expected US private sector job growth data that followed soft manufacturing numbers earlier in the week that fueled worries the world's largest economy could slip into recession.

The US currency also slid to a four-week trough versus the euro and earlier dipped to a two-week low against the yen before recovering to trade slightly higher on the day.

"We have seen big US data misses this week and that doesn't help dollar sentiment," said Shaun Osborne, chief FX strategist at Scotiabank in Toronto.

A private survey showed on Wednesday that US private-sector hiring in November unexpectedly slowed to its weakest pace in six months, as goods producers and construction companies cut jobs.

A Bloomberg report that the two sides were close to agreeing on the amount of tariffs that would be rolled back in a phase-one trade deal boosted the offshore-Chinese yuan by 0.2% to 7.05.

The Chinese currency had languished around seven-week lows to the dollar after US President Donald Trump said on Tuesday a trade agreement may be delayed until after the November 2020 US presidential election.

Overall, the dollar index fell 0.2% to 97.530, after earlier dropping to a one-month low of 97.433.

The dollar trades with an 11% premium in times of trade uncertainty, Osborne said, but the greenback seems to have peaked in October as trade tensions have somewhat eased.

Against the yen, the dollar rose 0.2% to 108.81 yen Sterling gained 0.9% versus the dollar to $1.3118, lifting the euro with it, which rose 0.1% to $1.1091.