The dollar eased on Wednesday as risk appetite faded following the unexpected dismissal of FBI Director James Comey, raising concern whether this latest issue could stall the implementation of the government's economic agenda.

President Trump said Comey - who had been leading an investigation into his 2016 presidential campaign's possible collusion with Russia to influence the election outcome - was let go due to his mishandling of an email scandal involving presidential nominee Hillary Clinton.

The move however ignited a political firestorm, raising suspicions that the White House was trying to blunt the FBI probe involving Russia.

The forex market was still dollar-bullish especially versus the yen as investors expect U.S. growth to pick up in the second half of the year and the Federal Reserve to maintain its rate-hike stance.

USD/JPY closed at its highs, above 114.30. Against a basket of six currencies, the dollar was down 0.1 percent at 99.55. EUR/USD traded in a tight range and closed near 1.0865.