The dollar edged lower on Wednesday, hitting its lowest level since Friday after minutes from the last US Federal Reserve meeting suggested policymakers did not set a specific pace of rate hikes.

According to the minutes of the January meeting, Fed officials last month agreed that, with inflation widening its grip on the economy and strong employment, it is time to tighten monetary policy, but that the decision will depend on meeting after meeting.

The strategist said the minutes suggested policymakers may not be as hawkish as investors fear. Members are not as aggressive as some might think, which is reflected in the modest dollar selling.

Fed President St. Louis James Bullard reiterated calls for a faster pace of Fed rate hikes, and stronger-than-expected US economic data including US retail sales data have helped underscore that view.

Those expectations have helped lend support to the dollar in recent sessions. At the Fed's Jan. 25-26 meeting, policymakers agreed that it would be "immediately appropriate" to raise the Fed's benchmark interest rate overnight from near-zero levels.

The dollar index was down 0.3%, while the euro was up 0.2% at $1.1383. The US dollar was down 0.4% against the Swiss franc and down 0.2% against the Japanese yen.

Dollar Movement Against Ukraine

On the geopolitical front, the United States and NATO said Russia was still building troops around Ukraine on Wednesday despite Moscow insisting it would withdraw.

Russia's defense ministry said its troops withdrew after exercises in southern and western military districts near Ukraine. The Russian ruble strengthened 0.73% versus the greenback to 75.14 per dollar.

The Bank of England has raised interest rates twice since December, and financial markets are expecting a further rate hike on March 17 following the BoE's next meeting.

The US dollar fell slightly on Tuesday as investors absorbed the latest news of the Russia-Ukraine standoff, with the dollar index briefly paring some of its losses late in the day after President Joe Biden said a Russian attack in Ukraine remained a possibility.

Biden, in a nationally televised address, also said reports that some Russian troops had moved away from the Ukrainian border had not been verified by the United States.

Earlier, Russia said that some of its troops were returning to bases after exercises near Ukraine, news that appeared to ease investor anxiety over the crisis in the region.

Dollar Weakens on News of Ukraine-Russia Crisis

Worries over the stalemate have driven recent gains in the safe-haven dollar, but most investors took a risk-on view on Tuesday, with US stocks rising.

The US dollar index was last down 0.3%, while the euro was up 0.5% against the dollar at $1.1358. The Russian ruble was up 1.80% versus the greenback at 75.32 per dollar.

Market participants will also remain wary of any comments this week from US Federal Reserve officials on the prospect of a rate hike.

Fed officials continue to debate how aggressively to start raising rates at their March meeting, with Fed President St. Louis James Bullard on Monday reiterated calls for a faster pace of Fed rate hikes.

Other Fed officials were less willing to commit to a half-point hike or even worried it could cause problems. The European Central Bank has joined its counterparts in signaling a hawkish shift in its monetary policy at this month's meeting.

The sterling was almost flat against the dollar at $1.3537. That has risen on expectations that the Bank of England is likely to raise interest rates again next month after lifting them twice since December.

Investors also valued data showing US producer prices rose the most in eight months in January. The data followed last week's report showing a strong rise in consumer prices in January, with the annual inflation rate registering its biggest rise in 40 years.