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FRANKFURT, Germany -- The dollar fell in Europe following a U.S Commerce Department report showing the economy did better in the first quarter, but it was still a subpar performance.

The 15-nation euro bought $1.5721 in morning European trading, up from $1.5667 in late New York trading Wednesday. The British pound rose to $1.9860 from $1.9727 on Wednesday and the dollar fell to 107.58 Japanese yen from 107.93 yen the night before.

The 1% annualized increase in gross domestic product, announced by the Commerce Department on Thursday, marked a slight improvement from the government's previous estimate of 0.9% growth for the January-to-March quarter. And, it showed the economy logging stronger growth than the feeble 0.6% pace registered in the final three months of last year.

Still, the first quarter's performance pointed to a fragile economy, shaken by housing, credit and financial debacles. That has made people and businesses more cautious in their spending and investment, restraining overall economic activity. More normal growth would be along the lines of a 2.5% to 3% pace, analysts said.

On Wednesday, the U.S. Federal Reserve left interest rates unchanged at 2% as expected. It marked the first time in 10 months that the central bank has not cut interest rates at one of its regular meetings.

Higher interest rates, used to combat inflation, can strengthen a currency by giving investors higher returns on investments. Lower interest rates can weigh on a currency.