The greenback strengthened slightly to start the European session with US 10-year bond yields also moving higher as investors awaited the release of FOMC meeting minutes.
Even so, investors remained cautious with currency trading limited ahead of two high-impact reports from the United States due to be published in the European session.
In addition to the FOMC minutes, investors are also focusing on the release of US retail sales data which is forecast to increase slightly in July.
Looking at the movements of major currencies, the Aussie dollar and the kiwi fell more heavily in the European session despite the decision of the Reserve Bank of New Zealand (RBNZ) policy meeting which saw interest rates rise by 50 basis points.
The RBNZ also offered a hawkish signal to stick with its stance on tightening monetary policy in the coming months.
Meanwhile, UK inflation data surprised investors when the reading showed a higher-than-expected reading of 10.1% in July.
Even so, the pound currency failed to react significantly as it was hampered by the stronger US dollar trade while investors were also wary of taking big steps ahead of the publication of the FOMC minutes.
Meanwhile, the yen traded lower against the US dollar amid expectations that the Federal Reserve will continue to tighten, widening its monetary gap with the ultra-loose Bank of Japan.
