LONDON (MarketWatch) -- The U.S. dollar was mixed versus major counterparts Wednesday, clawing back some of the previous day's sharp losses as risk appetite appeared to wane.
The dollar and the Japanese yen, which have both benefited from de-leveraging, liquidation and safe-haven flows during increased bouts of risk aversion, fell Tuesday after U.S. officials pledged to provide another $800 billion in liquidity to ailing credit markets. Read about the Fed measures.
The move initially lifted equity markets and boosted overall risk appetite, but big gains proved fragile, with U.S. stocks ending just slightly higher on the day Tuesday.
"The outlook for the (U.S. dollar) remains one of range-bound stability despite exceptionally high levels of financial market volatility," said Michael Woolfolk, a currency strategist at Bank of New York Mellon.
Strategists at Commerzbank said the resolve demonstrated by U.S. authorities on Tuesday "raised hopes in the market that the crisis can be overcome with government help."
But they cautioned that such enthusiasm could prove fragile.
"As the example of multiple other Fed and Treasury programs have taught, disillusionment could follow later," the strategists wrote.
The dollar also fell Tuesday in response to funding worries, strategists said, tied to the expansion of the Fed's balance sheet.
The dollar index , which tracks the U.S. unit against a basket of six major currencies, rebounded slightly to 85.178, up from 84.871 in late North American trade Tuesday.
The euro slipped to $1.2971 versus the dollar from $1.3049. Against the Japanese currency, the euro slipped to 123.37 yen from 124.39 yen.
The dollar also lost ground to the Japanese currency, off slightly to 95.09 from 95.32 yen late Tuesday.
The British pound retreated slightly to $1.5360 after surging to $1.5460 Tuesday.
