The dollar/yen was down 0.09 percent as of 08:30 GMT on Wednesday to trade at 108.70, with the greenback deepening losses in the light of ongoing geopolitical tensions and dovish remarks from members of the Federal Open Market Committee.

Geopolitical tensions in the Korean peninsula remained at record highs as a North Korean top official said Pyongyang is preparing “gift packages” for the United States.

Overnight, South Korean President Moon Jae in explained that the risks of the Korean crisis are becoming “uncontrollable”, as countries seem to be looking at weapons for a solution.

The US dollar index, which gauges the greenback against a basket of six major rivals, was 0.14 percent down to trade at 92.10 by the time of this writing.

But investors are not only looking at the international scene to define their sentiment. Expectations for a Fed rate hike went down yesterday on the back of dovish comments from FOMC members Brainard and Kashkari.

Fed Governor Lael Brainard said the regulator should be “cautious about tightening policy," as inflation levels remain below Federal Reserve targets.

Meanwhile, Minneapolis Federal Reserve Bank President Neel Kashkari said that rate hikes could be doing “real harm” to the economy, pointing out low inflation and employment growth.

“It’s very possible that our rate hikes over the past 18 months are leading to slower job growth, leaving more people on the sidelines, leading to lower wage growth, and leading to lower inflation and inflation expectations,” said Kashkari at the University of Minneapolis.

According to Fed funds tracked by CME Group’s FedWatch tool, traders are currently pricing in a 31 percent probability of a rate hike of 25 basis points by December.

From a technical view, we should turn our attention to the 108.50 mark. A break below it could open the doors to a downward move to 105.00. Otherwise, a consolidation is to be expected.