The U.S. dollar drifted lower against its key counterparts in the Asian session on Wednesday, as U.S. Treasury Secretary nominee Janet Yellen called for more fiscal stimulus to bolster the economy and investors awaited Joe Biden's swearing-in ceremony later today.

Yellen urged Congress to "act big" on COVID- 19 relief, arguing that the benefits of higher spending outweighed the implications of a higher debt burden during her confirmation hearing before the Senate Finance Committee on Tuesday.

The value of the U.S. dollar and other currencies should be determined by markets, Yellen said, adding that she opposes the manipulation of the currency values by other countries to gain an unfair advantage in trade.

Yellen's comments lifted Asian stocks, sending the dollar lower.

Joe Biden will be sworn-in as the 46th President of the U.S amid heightened security measures.

The incoming administration's plans to ramp up vaccinations raise hopes of a faster economic recovery from the COVID-19 crisis.

The greenback lost 0.3 percent to a 5-day low of 1.3669 versus the pound from Tuesday's closing value of 1.3622. On the downside, 1.42 is possibly seen as its next support level.

The greenback shed 0.2 percent against the euro, reaching a 5-day low of 1.2158. The EUR/USD pair had ended Tuesday's deals at 1.2129. Further fall in the currency may challenge support around the 1.24 level.

The greenback touched 103.72 against the yen, falling by 0.2 percent from yesterday's closing value of 103.90. Near term support for the dollar is likely seen around the 100 level.

The greenback was 0.1 percent lower against the franc, at 0.8872. At Tuesday's close, the pair was valued at 0.8881. Next key support for the greenback may be seen around the 0.86 region.

The U.S. currency dropped to 5-day lows of 0.7741 versus the aussie and 0.7149 against the kiwi, compared to Tuesday's closing values of 0.7692 and 0.7116, respectively. The greenback is seen finding support around 0.79 versus the aussie and 0.73 against the kiwi.

The greenback reached as low as 1.2691 against the loonie, setting a 5-day low. The greenback was worth 1.2733 against the loonie at yesterday's close. The greenback is likely to challenge support around the 1.25 level.

Looking ahead, Eurozone CPI for December is scheduled for release in the European session.

Canada CPI for December and U.S. NAHB housing market index for January are due out in the New York session.

At 10:00 am ET, the Bank of Canada announces decision on interest rates. Economists forecast the benchmark rate to hold at 0.25 percent.