The dollar fell against most major currencies Wednesday as dealers took profits on the currency's biggest rise in three weeks, with fresh data doing little to alter the view that U.S. interest rates will remain at record lows well into 2010.

A senior Federal Reserve official said sluggishness in pockets of the US economy should not deter the Fed from beginning to remove its extraordinary economic support.

U.S. producer prices rose more slowly than expected in October despite a rebound in food and energy costs, according to a government report on Tuesday that pointed to tame inflation pressures.

Federal Reserve Bank of San Francisco President Janet Yellen said on Tuesday the U.S. economy would grow into next year and accommodative policies could not be maintained for too long.

The dollar rebounded Tuesday from a 15-month low after Federal Reserve Chairman Ben Bernanke's rare comments on the currency spurred traders to trim long-term bets against the greenback.

The Fed's low interest rate policy has allowed investors to move into riskier assets in order to promote economic recovery, and there are no signs a U.S. asset bubble Building up for now, the central bank's number-two official said.

"I haven't been this bearish in a year," the well-known analyst told CNBC in a live interview. "I look at the board and every single stock is up.  But there is no fundamental rooting as to why."

Policy-makers are watching the dollar closely even though its decline has not been disorderly to date, a top Federal Reserve official said on Monday.

Federal Reserve Chairman Ben Bernanke said on Monday that the U.S. central bank was monitoring the declining value of the dollar closely.

Bristol-Myers Squibb said on Sunday it plans to split off its 83 percent stake in Mead Johnson Nutrition Company in a deal that lets Bristol shareholders exchange their shares for Mead Johnson common stock.

Significant weaknesses still have to work their way through the US economy, coupled with a rising level of debt, Kansas City Fed President Thomas Hoenig said Monday.

The dollar fell broadly Monday though it rose from session lows after Federal Reserve Chairman Ben Bernanke said the U.S. central bank is attentive to changes in the dollar.

The White House  Friday pushed back against a proposal in the U.S. Senate to create a single bank super-regulator and strip the Federal Reserve of its supervisory powers.

Ugly U.S. unemployment data and Republican Party political momentum could set the stage for a Federal Reserve next year that leans more toward putting workers back on the job rather than scaring off inflation.

The U.S. Federal Reserve Thursday banned overdraft fees on automated-teller-machine and debit-card transactions unless consumers have actively selected an overdraft protection service.