The dollar was mixed on Tuesday after the Federal Reserve signalled that it was unlikely to end its extraordinary pump-priming measures soon, dealers said.
In late morning trading here, the European single currency dipped to 1.4215 dollars from 1.4233 dollars in New York late on Monday.
The dollar slid to 93.97 yen from 94.21 yen reached late Monday.
Traders were digesting remarks from US central bank chief Ben Bernanke, who indicated that while the Fed was thinking about an "exit strategy" from its emergency credit steps, it was in no rush to tighten monetary policy.
"Economic conditions are not likely to warrant tighter monetary policy for an extended period," Bernanke wrote in the Wall Street Journal.
Analysts said Bernanke's semi-annual congressional testimony over two days starting on Tuesday would likely set the tone for the US dollar.
"Bernanke's testimony to be delivered later today is likely to be along the same lines as this article," said Barclays Capital analyst David Woo.
"He is also likely to give more detailed information on the Fed's exit strategy, but emphasise that with unemployment expected to stay high in coming quarters, the federal funds rate is expected to stay low for an extended period.
Woo added: "In our view, an upbeat tone and talk of exit strategies make it unlikely that Bernanke will discuss an expansion of quantitative easing."
Societe Generale currency analyst Patrick Bennett said that the Fed was likely to continue to pump funds into the financial system through the second half of next year and was unlikely to raise interest rates before 2011.
Investors were looking ahead to another batch of earnings reports from US firms for any signs of a turnaround in the ailing construction industry in the wake of surprisingly upbeat housing data.
Market players were relieved that troubled US lender CIT Group had reached an emergency loan agreement worth three billion dollars with a group of its main bondholders to avoid bankruptcy.
In trading here on Tuesday, the euro was changing hands at 1.4215 dollars against 1.4233 dollars late on Monday, 133.46 yen (134.10), 0.8634 pounds (0.8601) and 1.5194 Swiss francs (1.5196).
The dollar stood at 93.97 yen (94.21) and 1.0697 Swiss francs (1.0675).
The pound was at 1.6449 dollars (1.6546).
On the London Bullion Market, the price of gold decreased to 948.36 dollars an ounce from 952.75 dollars an ounce late on Monday.
