Dollar falls despite struggling stocks

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NEW YORK (CNNMoney.com) -- The dollar fell against the euro and the yen Wednesday despite downbeat economic data that sparked a selloff on Wall Street.

Investors generally look to the greenback as a safe haven when stocks struggle, but the risk-appetite correlation did not hold up today, said John Kicklighter, a currency strategist at DailyFX.com

The dollar fell 0.3% against the euro to $1.4636 and was also down 0.4% against the Japanese yen to ¥89.7115.

"There was a disconnect in the risk- appetite correlation," said Kicklighter, who expects the dollar to stabilize during the week.

"Even though concerns over the deficit are looming, the dollar is still one of the strongest out there as an investment source," he said.

The dollar had been gaining ground this week as investors second-guessed assumptions about economic recovery and trading on Wall Street becomes more volatile.

Mixed economic data: Stocks were down Wednesday afternoon as investors responded to the weak economic reports.

The Chicago PMI, the regional report on manufacturing, fell to 46.1 in September from 50 in August. Economists surveyed by Briefing.com expected the index to rise to 52. The unexpected decline highlighted concerns that economic recovery may not be as robust as previously thought, Lien said.

Payroll management company ADP said 254,000 private sector jobs were lost in September, a slight improvement from August when 277,000 private sector jobs were lost. But the total was worse than the 200,000 job cuts economists had expected.

However, some of Wednesday's economic news was healthier. The government said gross domestic product, the broadest measure of economic activity, fell at 0.7% annual rate in the second quarter, slightly better than the initially reported 1% decline and the 1.2% rate expected by economists.