In U.S. trading on Wednesday, EUR/USD was down 0.33% at 1.2877.
Government data released earlier revealed that U.S. industrial production fell more than expected in April, contracting 0.5% after expanding a revised 0.3% in March.
Analysts were expecting industrial production, which gauges output at the country's factories, mines and utilities, to contract by 0.2% last month.
Prices at the wholesale level in the U.S. disappointed as well.
The U.S. Department of Labor said the country's producer price index fell 0.7% in April, outpacing analysts calls for a 0.6% fall and beyond the 0.6% decline during the previous month.
Core producer price inflation, which excludes food and energy, rose 0.1% last month, in line with expectations after a 0.2% increase the previous month.
A regional manufacturing barometer in the U.S. disappointed as well.
The Federal Reserve Bank of New York's Empire State manufacturing index slid to -1.4 in May, from a reading of 3.1 last month, disappointing expectations for a rise to 4.0.
Weak data in Europe also bolstered the greenback's appeal.
Preliminary data showed that eurozone's gross domestic product contracted 0.2% in the first quarter, more than market calls for a 0.1% contraction though an improvement from a 0.6% decline in the previous quarter.
Germany's GDP rose less than expected in the first quarter, expanding 0.1% after a 0.7% decline in the previous quarter.
Still, analysts had expected the largest European economy to rise 0.3% in the first quarter.
Year-on-year, the German economy contracted by 1.7%, outpacing expectations for a 0.2% a rise after an increase of 0.1% in the fourth quarter.
Disappointing data often fuels bets that the Federal Reserve won't rush to phase out stimulus measures that weaken the greenback to spur recovery, especially a USD85 billion monthly asset-purchasing program known as quantitative easing.
The euro, however, fared worse on sentiments that the European Central Bank has room to cut rates further while in the U.S., the Fed can merely keep policy loose for longer but has no real room for further accommodation, which bolstered the dollar's global appeal as a safe harbor.
The greenback, meanwhile, was down against the pound, with GBP/USDtrading up 0.06% at 1.5219.
The Bank of England predicted earlier that U.K. economic growth may speed up to 0.5% in the second quarter from 0.3% in the first three months of the year, which gave the pound support.
Furthermore, official data showed that the number of unemployed people in the U.K. declined more than expected in April, dropping by 7,300 after a 9,900 decline the previous month.
Analysts were expecting a decline of 3,000.
Separately, the U.K. unemployment rate ticked down to 7.8% in March from 7.9% in February.
Analysts were expecting the unemployment rate to remain unchanged.
The dollar was down against the yen, with USD/JPY down 0.06% at 102.36, and down against the Swiss franc, with USD/CHF trading down 0.13% at 0.9658.
The dollar was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.05% at 1.0174, AUD/USD down 0.11% at 0.9880 and NZD/USD trading up 0.30% at 0.8222.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.29% at 83.94.
On Thursday, U.S. will unveil official data on building permits and housing starts. The U.S. is also to release official data on consumer inflation, initial jobless claims and the Philly Fed manufacturing index.
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