The dollar slid against most rival currencies as market participants took profits after the US currency failed to sustain strong gains against both the yen and the euro despite comments from Federal Reserve officials supporting further increase in US interest rates to combat inflation, dealers said. "Active profit-taking set in after the dollar failed to breach the 114.50 yen level for the third straight trading day," said Ryohei Muramatsu, group treasurer at Commerzbank. "But the failure of the dollar in testing the top-side resistance gave the market a good chance to adjust long dollar positions in the run-up to the release Friday of US nonfarm payroll data," he said. At 1.00 pm Tokyo (0400 GMT) the euro was firmer at 1.1933 usd, from 1.1923 usd earlier in Sydney and 1.1920 in late New York trading overnight. The dollar/yen eased to 113.89 from 114.33 in Sydney and 114.20 in New York. But analysts expect the dollar to regain ground long-term on expectations the Fed will continue its rate hike strategy. Overnight, Federal Reserve bank presidents kept up a steady drumbeat warning that higher inflation is the biggest threat to the economy from Hurricanes Katrina and Rita. A slowdown in growth is viewed as temporary, while higher prices need careful attention, the officials said in three separate speeches Tuesday. Richard Fisher, the president of the Dallas Federal Reserve Bank, said inflation is at the high end of the Fed's comfort zone and is starting to appear stubborn. But some dealers believe the near-term outlook for the dollar may be looking shaky. "The euro is now approaching a very heavy resistance band, and that top-heavy movement of the euro should offer some downside support for the dollar/yen," Mizuho Corporate Bank foreign exchange manager Tatsuro Karitani said. "But if the euro can break through that heavy resistance band, the decline of the dollar may gain momentum and reach the mid-113 yen level," he said.