NEW YORK: The dollar fell sharply on Wednesday as investors cleared out long positions on the greenback against the yen, sterling and euro in thin trading, with each rising more than 1 percent.
The dollar also fell 1 percent against the Swedish crown and Norwegian crown, which rebounded from a 13-year low against the dollar on Tuesday.
The market moves were largely technical, said Greg Anderson, global head of FX strategy at BMO Capital Markets in New York, saying they reflected positional trading and investors taking advantage of overbought positions for the dollar.
"This is just an old-fashioned clean-out in a thin market that's jittery ahead of next week," Anderson said.
The anticipated Federal Reserve interest rate hike next week has investors largely betting on dollar strength, Anderson said, allowing technical traders to take profit on short dollar trades.
The euro increased 1.2 percent, last trading at $1.1025, and sterling added 1.18 percent, to $1.5182. The dollar fell 1.45 percent against the yen, to 121.14 yen.
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