Investing.com - The dollar pulled away from one-week highs against other major currencies on Wednesday, as excitement over upcoming U.S. rare hikes faded and as investors turned their attention to Friday's U.S. inflation data.
The greenback initially found support after San Francisco Fed President John Williams said on Saturday that the Fed should raise interest rates three times this year given that economy will benefit from tax cuts.
The comments came a day after Cleveland Fed President Loretta Mester said she expects about four interest rate hikes this year, thanks to solid U.S. economic growth and low unemployment.
Market participants were now focusing on the release of U.S. inflation data due on Friday, for clues on the potential pace of rate hikes by the Federal Reserve.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.11% at 92.13 by 05:15 a.m. ET (09:15 GMT), off the previous session's one-week high of 92.36.
The euro was steady, with EUR/USD at 1.1940, while GBP/USD slid 0.32% to 1.3497.
The pound shrugged off earlier data showing that UK manufacturing production rose more than forecast in November.
The yen remained stronger, with USD/JPY down 0.82% at 111.74, while USD/CHF held steady at 0.9818.
The yen remained supported after the Bank of Japan tweaked the size of its bond-repurchase offer in its latest market operation on Tuesday, reminding investors that it will eventually normalize monetary policy.
Elsewhere, the Australian and New Zealand dollars were stronger, with AUD/USD up 0.14% at 0.7835 and with NZD/USD advancing 0.45% to 0.7194.
Meanwhile, USD/CAD slipped 0.12% to 1.2448.