The dollar shuffled in tight ranges on Wednesday after slipping from two-year highs against the euro and yen in the previous session when investors booked profits on worries the US currency had risen too high, too quickly.
The dollar had received a lift from another wave of expectations for higher US interest rates ahead of testimony by Ben Bernanke, the nominee for Federal Reserve chairman.
But after Bernanke's testimony reinforced the market's view that the Fed would keep raising rates, speculators and investors rushed to cash in on the dollar's big gains of late.
Since the start of September, the dollar has gained about 7.5 percent against the euro and 9 percent versus the yen.
The dollar has benefited from US companies repatriating overseas earnings under a one-time tax break that expires at year-end, while prospects for higher interest rates have lured even more investors to the currency's deposits and US bonds. The Fed's 16-month campaign to tighten credit has taken the overnight rate to 4 percent from 1 percent.
Several economists see the US rate rising to at least 4.5 percent next year, compared with the euro zone's historic low of 2 percent and near zero percent in Japan.
Bernanke vowed to fight for price stability, as expected and said he would carry on with the policies of Alan Greenspan, the Fed chief for nearly two decades who is set to retire on January 31.
The dollar edged up to 119.20 yen from around 118.90 yen in late NY trade thanks partly to yen selling in cross rates by model funds.
On Tuesday the US currency climbed to 119.43 yen on electronic trading platform EBS, the highest since August 2003.
The euro was little changed at $1.1715, a day after rebounding from a low of $1.1640, the weakest since November 2003. Since the start of the year it has shed about 14 percent.