NEW YORK - The U.S. dollar fell to a two-month low against a basket of currencies on Wednesday after weaker-than-expected U.S. private-sector jobs growth reinforced expectations the Federal Reserve will maintain its stimulative monetary policy.

The Fed ends its two-day policy meeting later in the day and is widely expected to keep its monthly purchases of $85 billion in bonds to support an economic recovery that’s still too weak for the job market to truly heal.

Recent data showing below-forecast U.S. first-quarter growth and an unexpected contraction in business activity in the Midwest have revived fears the world’s largest economy is encountering a soft patch. U.S. private employers added 119,000 jobs in April, well below economists’ expectations of 150,000 jobs, data showed on Wednesday.

The report, which also showed a downward revision to March’s private payrolls, came two days before the government’s nonfarm payrolls data.

“ADP is not a reliable indicator for jobs in the non-farm payrolls survey, but it does provide some lead to the direction of employment,” said Joseph Trevisani, chief market strategist at WorldWideMarkets, Woodcliff Lake in New Jersey.

“Today’s weak report will discourage those who expect a return to stronger employment and may weaken the dollar.”

The dollar index, which measures the U.S. currency’s value against a basket of currencies, dropped as low as 81.331, its weakest since Feb. 25. It was last at 81.469, down 0.3 percent.

A weak reading for the Institute of Supply Management’s survey of U.S. manufacturing activity, due at 10 a.m. EDT (1400 GMT), could intensify worries about the U.S. economy.

Investors are waiting to see if a sluggish recovery and slowing inflation may even push the Fed into buying more assets. Only a month or so ago, investors expected the Fed to start scaling back asset purchases.

“We think the Fed will be as dovish as it can afford to be, and as such the softness of the dollar is justified and if anything it could extend a bit further,” said Adam Cole, global head of FX strategy at RBC Capital Markets.

Weakness in the dollar helped drive the euro to a two-month high despite growing expectations the European Central Bank will cut interest rates on Thursday.

With the May Day holiday keeping Europe’s markets closed, the euro rose 0.5 percent to $1.3226. It had earlier risen to $1.3242, according to Reuters data, its highest level since February 25, after the ADP release. But the euro’s gains may be limited given Europe’s deteriorating economic outlook.

Many traders also expect the euro to fall if the ECB cuts rates on Thursday, although large options expiries reported at $1.3200 could keep it close to current levels.

Some analysts said the euro could eventually strengthen should ECB take steps to shore up growth.

Against the yen, the dollar slipped 0.2 percent to 97.20 yen .

The pound rose to its highest against the dollar since mid-February at $1.5597, helped by a better-than-expected UK manufacturing survey.

The Australian dollar fell 0.5 percent to $1.0321 after data showed growth in China’s manufacturing sector unexpectedly slowed.