The US dollar gave up the gains it made against the euro in New York as traders sold the greenback following less than "hawkish" statements made by the Fed Chairman Alan Greenspan.
The Fed Chairman testified today before the congress in his semi-annual testimony on the economy. The speech initially fuelled the dollar rally when it was revealed that the current US benchmark rates are "fairly low", the growth has "firmed and the "fundamentals are stabilizing".
Mr. Greenspan also added that the US economy might grow at 4 percent this year and made it clear that the rate hikes will continue. The bearish dollar sentiment returned to the markets as soon as the traders saw that the Fed Chairman's testimony carried no drastic language regarding the dollar.
The US dollar was quoted at 1.3023-26 against the euro, 1.8840-45 versus the pound and 105.49-53 against the Japanese yen at 23:30 GMT.
Wall Street stocks remained unchanged as traders remained on the sidelines during the congressional testimony by the Fed Chairman Alan Greenspan.
The Dow Jones Industrial Average and the Standard and Poor's 500 both finished unchanged 10,834.58 and 1,210.33. The NASDAQ Composite lost 0.1 percent at 2,087.43.
Coca-Cola rose 1.5 percent to $43.30 after the soft drinks giant announced better than expected earnings.
Moody's Corp, the rating agency lost 3 percent to $85.82 despite announcing an increase in dividend and a 2-for-1 stock split.
Network Appliance fell 7.7 percent to $31.73 the company announced results below expectations.
Leapfrog Enterprises, a maker of educational toys tumbled 10 percent to $10.90 after announcing another disappointing quarterly earnings.
Yankee Candle shed 12.4 percent to $29.60 after it announced a quarterly profit that fell short of analyst estimates.
The NYMEX crude oil futures contract for March delivery rallied $1.07 to $48.33 a barrel after the OPEC stated that global demand was above forecasts, led by surging demand from China.
COMEX gold futures contract for April delivery gained 20 cents to $427.10 per ounce.