The U.S. dollar appreciated against its most major rivals in the New York session on Wednesday, as risk sentiment dampened after Fed Chair Jerome Powell warned of an economic downturn in the wake of the central bank's monetary policy tightening to control inflation.

Speaking at the European Central Bank's forum in Sintra, Powell said that the central bank would not allow a transition from a low inflation environment to a high inflation environment.

"We had expected that this year that growth would moderate to a more sustainable path. We also are, of course, raising interest rates and the aim of that is to slow growth down so that supply will have a chance to catch up," Powell added.

U.S. stocks are mostly lower as investors weighed the prospects of aggressive interest rate hikes that could fuel a recession.

Revised data from the Commerce Department showed that U.S. economic activity shrank slightly more than previously estimated in the first quarter of 2022.

The report showed the decrease in real gross domestic product in the first quarter was revised to 1.6 percent from the previously reported 1.5 percent. Economists had expected the drop in GDP to be unrevised.

The slightly bigger than previously estimated decline in GDP in the first quarter came on the heels of the 6.9 percent spike in GDP in the fourth quarter of 2021.

The greenback firmed to near 2-week highs of 1.0467 against the euro and 1.2106 against the pound, up from its early lows of 1.0536 and 1.2213, respectively. The greenback is likely to find resistance around 1.03 against the euro and 1.20 against the pound.

The greenback touched 137.00 against the yen, its strongest level since September 1998. If the greenback strengthens further, it is likely to test resistance around the 139.00 level.

The greenback hovered at a fresh 2-week high of 0.6862 against the aussie. On the upside, 0.67 is possibly seen as its next resistance level.

The greenback moved up to a fresh 2-week high of 0.6205 against the kiwi and a 2-day high of 1.2900 against the loonie, reversing from its prior lows of 0.6260 and 1.2844, respectively. The greenback is seen finding resistance around 0.60 against the kiwi and 1.31 against the loonie.

In contrast, the greenback held steady against the franc, after having dropped to more than a 2-month low of 0.9495 at 7:30 am ET. At yesterday's trading close, the pair was quoted at 0.9572.

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