The dollar weakened in early Wednesday trading after lower crude oil prices gave signs of renewed risk appetite ahead of a series of central bank monetary policy meetings.
The dollar fell against the yen, which moved away from levels where traders had been preparing for Japanese government intervention, ahead of a meeting in Washington between US President Donald Trump and Japanese Prime Minister Sanae Takaichi.
The dollar reversed course against the euro during the day, as the euro rose for the third consecutive session ahead of a two-day meeting at the European Central Bank.
However, the dollar, which is considered a safe haven, has generally risen since the US and Israeli attack on Iran about three weeks ago.
While the war had driven up oil prices, prices fell by more than $2 a barrel after the Iraqi government and authorities in the Kurdistan Region of Iraq agreed to resume oil exports through the Turkish port of Ceyhan starting Wednesday.
Hirofumi Suzuki, senior foreign exchange analyst at Sumitomo Mitsui, said that with crude oil prices temporarily halted for the time being, conditions do not appear to have improved significantly, but markets in general seem to be recovering somewhat.
The dollar index, which measures the performance of the US currency against six other major currencies, fell 0.04 percent to 99.51, extending its losses for the third consecutive session. The euro rose 0.04 percent to $1.1543.
The yen rose 0.21 percent against the dollar to 158.64 per dollar. Sterling gained 0.1 percent to $1.3368.
The dollar reached a 10-month high at the end of last week, as conflict in the Middle East and rising oil prices prompted investors to seek safe haven in US assets.
The Australian dollar rose 0.21 percent to US$0.7117 on Wednesday, and the New Zealand dollar rose 0.19 percent to US$0.5868, according to Reuters data.
Japan's public broadcaster NHK reported that the United States and Japan are preparing to issue a joint statement agreeing to an investment of up to 11 trillion yen ($69.30 billion). The dollar showed little movement against the yen following the report.
On the central banking front, the Federal Reserve (the US central bank) will announce its monetary policy decision on Wednesday evening, followed by the European Central Bank, the Bank of England and the Bank of Japan tomorrow.
It is widely expected that all these central banks will keep interest rates unchanged. Traders will be looking for comments on inflation and the economic outlook amid the war in the Middle East.
As for cryptocurrencies, Bitcoin fell 0.50 percent to $74,184.63, while Ether rose 0.04 percent to $2,329.46.
