Dollar stumbles as optimism from fragile Israel-Iran truce lingers
In other currencies, the New Zealand dollar rose 0.13% to $0.60, while the yen steadied at 144.96 per dollar.
Some Bank of Japan policymakers called for keeping interest rates steady for the time being due to uncertainty over the impact of US tariffs on Japan's economy, a summary of opinions at the bank's June policy meeting showed on Wednesday.
The Swiss franc, which scaled a 10-1/2-year high on Tuesday, steadied at 0.80 per dollar.
Against a basket of currencies, the dollar eased slightly to 97.91.
While Federal Reserve chair Jerome Powell stuck to his cautious approach and reiterated the central bank was in no rush to ease rates at his semi-annual testimony to Congress on Tuesday, markets continue to price in a roughly 18% chance that the Fed could cut in July, according to the CME FedWatch tool.
'We think economic growth is slowing and the improvement in services and shelter inflation will push back against tariff rises, allowing cuts to resume in September,' ANZ analysts said in a note.
A raft of weaker than expected US economic data in recent weeks have bolstered expectations of Fed cuts this year, with futures pointing to nearly 60 basis points worth of easing by December.
Data on Tuesday showed US consumer confidence unexpectedly deteriorated in June as households grew increasingly worried about job availability, another indication that labour market conditions were softening.
The two-year US Treasury yield, which typically reflects near-term rate expectations, fell to a 1-1/2-month low of 3.7870% on Wednesday.
The benchmark 10-year yield was little changed at 4.3043%.
Reuters
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