NEW YORK -- The dollar rebounded Wednesday on profit-taking from its lowest levels this week against the euro, yen and Swiss franc. The U.S. unit hit intraday highs across the board but currency analysts say this isn't a trend change. The so-called barometer for the recent rally in risk appetite, the Australian dollar versus the yen, remains near an eight-month high. "Speculators have been quite active during this 'green shoots' rally," said Michael Woolfolk, senior currency strategist at Bank of New York Mellon. "Whenever we're seeing a pullback in the euro or sterling, it has been largely profit taking." The euro recently fell as low as $1.3996, while the dollar climbed to ¥98.25 and 1.0810 Swiss francs. The euro may also be falling against the dollar due to strong gains by the U.K. pound. The euro fell to a fresh six-month low against the U.K. unit recently, GBP0.8555. "Typically, when you see one of the majors moving strongly, it will have a knock-on effect on the other currencies," said Mr. Woolfolk. Wednesday morning in New York, the euro was at $1.4010 from $1.4075 late Tuesday. The dollar was at ¥98.08 from ¥97.39, according to EBS. The euro was at ¥137.42 from ¥137.10, and the U.K. pound was at $1.6344 from $1.6333. The dollar was at 1.0801 Swiss francs from 1.0777 Swiss francs late Tuesday. Overnight, the euro had gained as high as $1.4145 and the dollar fell to ¥97.08. Rising oil prices and global equities had supported the dollar sell-off into riskier assets. Crude-oil futures set new seven-month highs above $71 a barrel on Wednesday. "Absent a turn in the risk environment, the dollar's main hope is a further rise in two-year yields," said Chris Turner, head of foreign exchange strategy at ING Financial Markets in London, who added that "the core trend of portfolio re-allocation" has re-emerged. Goldman Sachs initiated a long euro position against the dollar, targeting $1.45. "Normalizing risk aversion, higher oil prices and a much weaker domestic demand outlook for the U.S. are the main reasons for this stance," they said. Currency traders are also looking ahead to this weekend's Group of Eight meeting of finance ministers in Lecce, Italy. A senior Japanese Finance Ministry told reporters Wednesday that leaders are expected to discuss recent climbs in long-term interest rates, however it's unlikely to be a major topic. U.S. Treasury Secretary Timothy Geithner said Tuesday he will tell his counterparts at the G8 that aggressive efforts to support growth and restore the health of financial systems must continue. He said, "What matters to all of us is, are they going to achieve enough?" However, Mr. Geithner downplayed the prospect that any new initiatives will be announced at the two-day meetings, describing the gathering as a chance to "take stock" of measures launched by G20 leaders in London. Separately, G8 member Russia said it plans to reduce the proportion of gold and foreign exchange reserves it invests in U.S. Treasury bonds, Interfax news agency reported. Central bank Deputy Chairman Alexei Ulyukayev said just over 30% invested of its $401.1 billion reserves are in U.S. Treasurys at present, but he didn't specify by how much that figure would fall. He said reserves would instead be placed on deposit and invested in bonds issued by the International Monetary Fund. The Canadian dollar is lower Wednesday and is showing signs of consolidation after wide price swings in recent sessions. The Canadian unit has lately drawn support from strong oil prices, but was undermined to a degree Wednesday by news that Canada posted an unexpected trade deficit of C$179 million (US$162 million) in April. The U.S. dollar was recently trading at C$1.1093 from C$1.1027 late Tuesday.

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