Encouraging reports on the U.S. housing market sent traders out of the dollar and into riskier currencies.

Moody's decision to forgo downgrading Spain's government debt rating also made traders more comfortable owning the euro.

The Commerce Department reported early Wednesday that U.S. builders started construction on homes in September at the fastest rate since July 2008 and made plans to build even more homes in the coming months.

The euro rose to $1.3127 from $1.3043 late Tuesday and the British pound rose to $1.6154 from $1.6113.

The dollar fell to 97.78 Canadian cents from 98.71 Canadian cents and to 0.9219 Swiss francs from 0.9270 Swiss franc.

The dollar rose to 78.98 Japanese yen from 78.90 yen.