Sterling fell today to a one-week low before paring the losses and trading near the opening, after the dollar reversed lower following the second part of Fed chair Yellen's Congress testimony.
 
GBP/USD last traded at 1.2456, down from the opening of 1.2465, with an intraday high at 1.2481, and a low at 1.2383.
 
Sterling's earlier drop came as the dollar rebounded to a five-week high against a basket of currencies, heaping pressure on the pound, specially following strong retail sales and inflation data from America, bolstering the case for another Fed rate hike.
 
The pound however pared the losses after Fed Chair Yellen didn't mention interest rates in her second day of testifying ahead of Congress, focusing instead of the monetary policy and the economy's conditions, pushing the dollar lower and helping the pound pare losses.
 
The dollar is dominant overall on the pound due to policy divergence between the Fed, which could raise interest rates again in the March meeting, and the Bank of England, which is likely to keep the current low interest rates and the stimulus program intact.

Euro pared its losses on Wednesday after hitting a five-month low as the dollar stopped rising against a basket of currencies following the second day of Fed Chair Yellen's Congress testimony, hovering at the opening.
 
EUR/USD last traded at 1.0583, compared to the opening of 1.0580, with a session-high at 1.0587, and a low at 1.0522.
 
The dollar backed off a five-week high against a basket of currencies, trading at the opening, after Yellen's second-day testimony pointed to the current monetary policy and how appropriate it is for the current conditions, while not mentioning rate-hike forecasts, snapping the dollar out of its winning streak and buoying the euro.
 
The dollar is till drawing support from strong U.S. data today, with consumer prices up by the most since mid-2013 as retail sales improve as well, underpinning the greenback.
 
On the other hand, the euro pared its losses but kept trading near a five-week low amid ongoing negative pressure from dollar's strength and political tensions in the Eurozone, curbing demand on European assets.

Fed Chair Janet Yellen presented the second part of her testimony ahead of Congress, saying the current monetary policy is appropriate for the conditions, and that the liquidity level in the markets is appropriate as well and the bank won't intervene to change it.
 
Yellen asserted that the current policy remains accommodative, in order to support growth, specially as the U.S. economy recovers and registers growth rates higher than the Eurozone after the suffering of the household sector in recent years following the global financial crisis.
 
The goal of the Federal Reserve remains to achieve full employment and carry inflation towards the 2% target, and while inflation does near the target, the Fed will tighten its policy accordingly by increasing interest rates.

The Energy Information Administration released its report on U.S. crude stocks, showing a rise of 9.5 million barrels in the week ending February 10, passing expectations of a 3.7M rise, and adding to the previous reading's 13.8M rise.