The dollar retreated across the board on Wednesday as U.S. Treasury yields eased from more than one-year highs, although most investors are convinced the greenback's upward trend is intact.
The dollar fell especially hard against Japan's yen and the Swiss franc, which are seen as safe havens which usually gain when higher-risk assets like equities fall.
U.S. bond yields retreated from 13-month highs reached overnight as investors awaited further signs of whether the economy is gaining enough strength for the Federal Reserve to pull back on its bond purchases.
"In absence of news, the primary thing that we've been trading off of for the last 48 hours has been U.S. Treasury yields," said Boris Schlossberg, managing director of FX Strategy at BK Asset Management in New York.
"As bond yields decline a little bit, there's profit-taking," he said. "The dollar has been very strong for the last several weeks."