The dollar fell on Thursday after Federal Reserve Chairman Alan Greenspan reiterated that the US economic outlook was healthy but gave no clear idea how high the Fed would raise interest rates. The currency initially hit multi-month highs after Greenspan told Congress on Wednesday that economic growth was steady and inflation contained, suggesting the dollar would keep benefiting from a widening rate advantage over the euro and the yen.
But it gave up those gains after failing to climb past key levels and as knee-jerk buying gave way to a realisation that the Fed chief had offered no fresh insight in his twice-yearly testimony.
"The tone of his testimony was not obviously different from the last statement from the FOMC," said Kikuko Takeda, a currency analyst at Bank of Tokyo-Mitsubishi.
Some traders who had expected more hawkish comments from Greenspan were seen taking profits on the dollar.
He is to appear before the Senate at 1400 GMT but is due to deliver the same speech, and analysts do not expect any fresh remarks from the subsequent question-and-answer session.
The policy-setting Federal Open Market Committee has raised the key funds rate by 25 basis points at nine straight meetings, bringing it to 3.25 percent.
The key rate in the euro zone has stood at 2 percent for two years and Japan's has stuck near zero for even longer.
Partly due to the allure of higher US rates, the dollar has risen around 10 percent against the euro and the yen this year.
The dollar fetched around 112.60 yen down from 112.90 in late US trade. It had climbed to a fresh 14-month high of 113.73 yen on Wednesday.
The euro was up slightly at $1.2155, building on a nearly 1 percent gain on Wednesday.
The single European currency fetched around 136.90 yen after rising to a fresh three-month high just above 137.20 yen earlier in the Tokyo session.
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