The US dollar retreated against the majors in New York as traders locked in their gains following a five-day rally after comments made by Jack Guynn, President of Federal Reserve Bank of Atlanta.
Mr. Guynn comments that the Federal Reserve may drop the word "measured", rattled the markets as traders interpreted the comments as a signal of slowing interest rate hikes. The greenback fell from the three-month high it made against the majors, as dollar bulls were overwhelmed by the offers after the market began pricing in the slower interest rate increases.
The dollar was quoted at 1.2808-11 against the euro, 1.8585-90 versus the British pound, and 105.53-57 against the Japanese yen at 23:00 GMT.
Wall Street headed south as disappointing results from the semi-conductor sector set the bearish tone for the rest of the market despite stunning news from Hewlett-Packard.
Dow Jones Industrial Average lost 0.3 percent to close at 10,664.11. Standard and Poor's 500 fell 0.9 percent to 1,191.99 and the NASDAQ Composite slipped 1.6 percent to 2,052.55. The Philadelphia Semiconductor index fell 2.2 percent to 417.92
Cisco, the computer network equipment giant, fell 3.3 percent to $17.63 after the company's' earnings missed analyst estimates.
Intel, the world's biggest chip company, fell 0.5 percent to $23.30 after Cisco's report.
Shares in Hewlett-Packard, a computer maker, rallied 7.3 percent at $21.53 after the surprise resignation of Carly Fiorina as the chief executive officer
Insurance companies bucked the general trend after American International Group, the biggest US insurance company, rose 2.3 percent to $69.31 as its fourth-quarter earnings beat forecasts. Cigna, health insurance provider, rose 1.7 percent to $85.35 after the company topped analysts estimates.
The NYMEX crude oil futures contract for March delivery remained virtually unchanged at $44.60 per barrel, after the EIA report revealed that US oil inventories declined by 1 million barrels last week, leaving supplies 8.4 percent higher than a year ago.
COMEX gold futures contract for April delivery lost 30 cents to $414.20 despite dollar retreat against the majors.
The US Treasury bonds rallied after the Federal Reserve's Jack Guynn comments about a possible slowdown in the pace of interest rate increases sent the yield on the 10-Year note below 4 percent for the first time on four months.