Dollar declines after a day in the sun
Greenback gives up ground won in previous session as traders discount Fed Chairman's remarks.
NEW YORK (CNNMoney.com) -- The dollar fell against other major currencies Wednesday, giving up gains made in the previous session.
The 15-nation currency bought $1.5716 in morning trade, up from $1.5657 late Tuesday in New York.
The British pound was quoted at $1.9738, up from $1.9689. The dollar rose to buy ¥107.31 from ¥107.45 the day before.
"I think the dollar got a temporary reprieve form comments made yesterday by chairman Bernanke," said Stephen Malyon, a currency analyst at Scotia Capital in Toronto. "But that's already started to fade."
"The market is still quite concerned about downside risks to U.S. growth, particularly credit concerns and problems in the equity markets," he added.
Fed Chairman Ben Bernanke said Tuesday that the central bank plans to adopt stricter rules aimed at preventing the shady lending practices at the heart of the current U.S. mortgage mess.
Bernanke also said that the Fed may give struggling Wall Street firms more time to take advantage of the central bank's emergency loan program designed to help stabilize the nation's financial system. (Full Story)
The dollar is also responding to a rebound in oil prices.
Crude prices had fallen sharply in recent sessions but rose Wednesday on renewed political tensions in the Middle East.
The Associated Press reported Wednesday that the Iranian military test-fired nine long and mid-range missiles as part of a war games exercise.
Iranian military officials reportedly said the exercise was in response to U.S. and Israeli threats against the Islamic republic's nuclear program. (Full Story)
"If crude continues to spiral higher that increases the downside risk to oil importing countries like the U.S. and can be reflected in the currency," said Malyon.
But the connection between the U.S. dollar and oil prices is not a "one-to-one relationship," he added. 
