The dollar fell versus the euro and yen Tuesday on profit-taking following strong gains on the back of a US government takeover of two beleaguered mortgage groups, dealers said.
The euro rose to 1.4155 dollars in morning London trade from 1.4129 dollars late Monday in New York.
Against the Japanese currency, the dollar fell to 107.75 yen from 108.27 yen on Monday.
The yen rose against other major currencies as investors shed risky bets on credit market concerns despite the US government bailout of Fannie Mae and Freddie Mac over the weekend, dealers said.
Equity markets worldwide had surged on Monday and the dollar hit an 11-month high versus the euro after Washington's unprecedented takeovers sparked hopes of an easing of the US housing crisis and resulting credit crunch.
Foreign exchange market players were uncertain if the US plan would stave off further credit-related losses.
"The net result may be that the move has resolved some uncertainty -- about both the timing and precise details of any takeover -- but not to change very much more," Barclays Capital analyst David Woo said in London.
"A government bail out of some form had been widely expected, the key question had been when. It seems unlikely to make any meaningful change to the slowdown of global growth beyond some support for US growth.
"And while it does help the financial sector, it is far from curing all its problems. Banks are still part way through a prolonged period of consolidating their balance sheets," Woo added.