The dollar fell to its lowest level this year against the euro in early trade on Wednesday, as traders awaited potentially decisive revisions to U.S. jobs data later in the day, ahead of a speech by Federal Reserve Chairman Jerome Powell at the end of the week.
The dollar was affected by the decline in US bond yields, which reached their lowest levels since August 5, when yields plunged to their lowest level in more than a year after surprisingly weak monthly jobs figures raised recession fears.
Powell's keynote speech on Friday at the Federal Reserve's Jackson Hole Economic Symposium in Kansas City will be closely watched for any hints about the likely size of the rate cut next month and whether borrowing costs are likely to be lowered at each subsequent Fed meeting.
The dollar index, which tracks the currency against the euro, pound, yen and three other major currencies, fell to its lowest since Jan. 2 at 101.34 at 0026 GMT, after falling 0.5 percent or more in each of the previous three sessions.
The euro rose to $1.1131, its highest level since December 28.
The pound was steady at $1.3033 after touching a high of $1.3054 on Tuesday, a level last seen in July last year.
The dollar fell 0.2 percent against the Japanese currency to 144.98 yen, after earlier falling to 144.945 yen, falling below the important psychological barrier of 145 yen for the first time since August 6.
The Australian dollar hovered just below a one-month high against the greenback of $0.6749 hit on Tuesday. The New Zealand dollar rose slightly to $0.61585, its highest since July 8.
