The U.S. dollar was narrowly mixed Wednesday as dealers remained on the sidelines, reluctant to take on new positions, traders said.

The Canadian dollar is the only thing that has moved, said Walter Simon, a trader at Bank Julius Baer in New York. Traders said wide interest-rate differentials between Canada and some of the other major industrialized nations, in addition to a relatively healthy Canadian trade balance, attracted interest in the Canadian dollar.The U.S. dollar recouped some of its earlier losses around mid-morning, but traders attached no significance to the move.

It's all coming from overseas, said Martin McNulty, a trader at Lloyds Bank in New York. Some Europeans are squaring their positions.

Sentiment continued to be negative for the greenback, but its downside is limited for the near term amid an ongoing fear of central bank intervention, dealers said.

Mr. McNulty said he expects to see intervention if the dollar dips to 1.6550 deutsche marks and 123.70 yen.

Meanwhile, Mr. Simon said the market is preparing for a sharp move that could send the dollar in either direction.

There are a lot of positions on both (long and short) sides, he said. It looks as though there are a lot of anxious people who aren't comfortable being short or long.

In London Wednesday, the dollar was steady in lackluster trading.

Traders said the foreign exchange markets failed to respond to news of slightly higher than expected U.S. March consumer prices. The March consumer price index rose 0.5 percent on the month, vs. analyst expectations of 0.3 percent to 0.4 percent.

One trader said: This is one of the quietest days this year. Everyone is bearish on the dollar, but the gulf tension and fears the central banks are waiting in the wings to intervene has created a stalemate.

Sterling continued to be depressed by resistance at 3.15 deutsche marks and $1.90, traders said. They said sentiment remains positive on sterling, but expectations the Bank of England may intervene to curb any strong rise or cut interest rates continued to hold sterling back.