The dollar's rally ran out of steam on Wednesday as traders locked in profits after the currency hit a five-month high against the yen and a two-month peak versus the euro the previous day.
The dollar rose to around 108.90 yen on Tuesday, its highest level since Oct. 19. That was up more than 5 percent in less than a month on hopes that the U.S. Federal Reserve might boost the pace of interest rate rises to nip inflation in the bud.
But the perception that the rally may have gone too far too fast prompted traders to take profits, especially after Fed chief Alan Greenspan did not mention the threat of inflation when he talked about soaring oil prices late on Tuesday.