The euro hovered near a 7.5-month low against the dollar as investors braced for the European Central Bank to roll out more stimulus, giving an extra boost to the U.S. currency after it scaled new heights on the prospect of a Federal Reserve rate hike. The divergence in monetary policy between the two currencies was highlighted anew on Wednesday when Federal Reserve Chair Janet Yellen hinted at a rate hike later this month. Her hawkish comments sent the euro to $1.05500, its lowest level against the greenback since mid-April, though profit-taking ahead of the ECB's policy announcement helped to push the single currency back to $1.0610. Yellen said she was "looking forward" to a U.S. interest rate hike, expressing confidence in the U.S. economy.
The dollar also rose to 123.68 yen, a two-week high, on Wednesday, before paring gains as a big fall in oil prices prompted traders to ease off on riskier trades.
Russia's ruble edged lower early on Wednesday, in line with weaker oil prices and low trading volumes. At 0712 GMT, the ruble was 0.2% weaker against the dollar at 66.76 and at 70.90 versus the euro, less than 0.1% down. Brent crude oil, a global benchmark for Russia's main export, was down 0.5%, at $44.2 a barrel.
The Canadian dollar rose against the U.S. dollar on Wednesday after the Bank of Canada held interest rates steady but used less dovish language in its policy statement than some expected. The bank kept its benchmark rate steady at 0.5%, as expected, though it said vulnerabilities in the household sector continued to edge higher. The Canadian dollar settled at C$1.3349 to the greenback, or 74.91 U.S. cents, firmer than the Bank of Canada's official close on Tuesday of C$1.3364, or 74.83 U.S. cents.