The Dollar edged up on Wednesday after declining to more than a three-month low on forecasts the Fed will soon start slashing rates.

One of the biggest movers of the day was the New Zealand Dollar, up 0.49% to $0.6166 at the time of writing, as the Reserve Bank of New Zealand (RBNZ) held interest rates steady but cautioned that additional policy tightening may be required.

Earlier on Wednesday, the kiwi rose over 1% to a four-month high of $0.6207, Reuters reports.

The greenback fell on Tuesday following comments from Federal Reserve official Christopher Waller, who noted a potential rate cut in the coming months.

"(Waller's) relatively hawkish, historically speaking, so if his attitude is turning a little bit more dovish, it sort of says that perhaps a general consensus of the board members is that rates have peaked and maybe could even be cut next year," according to Kyle Rodda, senior financial market analyst at Capital.com.

The Dollar index, measuring the greenback against six rivals, fell to its lowest since the beginning of August at 102.46. The index subsequently trimmed some of the losses and, at the time of writing, was 0.12% higher at 102.73.

The Dollar was on course to decline 3.7% this month, its largest monthly fall in a year, the Reuters report adds.

Elsewhere, the Euro surpassed the $1.10 mark for the first time since August on Tuesday but reversed some of these gains to trade at $1.0991.

Price pressures in the eurozone continued to ease this month, according to inflation data from Spain and the German state of North Rhine-Westphalia.

"On an intraday basis (the Euro) has come off the high... so there has been some impact for sure," said the head of Asia FX strategy at RBC Capital Markets, Alvin Tan.

"But of course, on the flip side, US bond yields are continuing to grind lower. There are two contrasting forces at play here," he added.