U.S. Dollar Showing Weakness On Powell's Remarks

The U.S. dollar drifted lower against its key counterparts in the European session on Wednesday, as investors digested less-hawkish comments from Federal Reserve Chair Jerome Powell.

Powell said that "disinflation has begun," although it has a long way to go.

The Fed Chair said that he expects "a significant decline in inflation" this year, but price pressures will not fall to 2 percent until next year.

Dovish comments from Powell helped ease worries about interest rate hikes and lifted European shares.

The benchmark yield on the 10-year note fell to 3.655 percent. Yields move inversely to bond prices.

The greenback weakened to 130.60 against the yen and 1.0761 against the euro, off its early highs of 131.38 and 1.0722, respectively. The greenback may find support around 121.00 against the yen and 1.09 against the euro.

The greenback declined to 5-day lows of 1.2110 against the pound and 0.9178 against the franc, from its early highs of 1.2030 and 0.9224, respectively. The greenback is seen finding support around 1.24 against the pound and 0.90 against the franc.

The greenback dropped to 5-day lows of 1.3360 against the loonie and 0.6996 against the aussie, after rising to 1.3407 and 0.6948, respectively in early deals. The greenback is poised to test support around 1.31 against the loonie and 0.72 against the aussie.

The greenback reversed from an early high of 0.6309 against the kiwi and edged down to 0.6348. If the greenback falls further, 0.66 is possibly seen as its next support level.