The kiwi fell to 86.05 US cents at 5pm in Wellington from 86.28 cents at 8am, though still up from 85.63 cents on Tuesday. The trade-weighted index rose to 80.19 from 79.87 on Tuesday.
The Federal Open Market Committee is expected to keep interest rates near zero and trim monthly quantitative easing by a further $US10 billion ($NZ11.6b) to $US55b when it ends its meeting on Wednesday in Washington.
Traders will be looking to see Ms Yellen’s take on how the US economy is tracking after a harsh winter weighed on the world’s biggest economy.
“I wouldn’t be surprised if Yellen showed more caution when she comes out with the press conference,” said Stuart Ive, senior client adviser at OMF in Wellington.
“It’s more than likely kiwi dips should still be bought against the US dollar.”
New Zealand’s current account deficit narrowed to $800 million in the fourth quarter, with surging dairy exports offsetting an outflow of profits for foreign-owned companies.
The local currency also got a boost from an agreement between the New Zealand and Chinese governments to allow direct trade between the kiwi and yuan to try to stimulate further trade and investment.
The kiwi gained to 5.3324 yuan from 5.2974 yuan on Tuesday.
The kiwi also increased to 87.25 yen from 87.16 yen, to 94.38 Australian cents from 94.24 cents and to 61.81 euro cents from 61.46 cents.