The US dollar fell again after failing to continue its gains in the previous session as investors grew increasingly uneasy ahead of the Federal Reserve's (Fed) first policy decision for the year.
The currency king surged to a two-session one-week high on Tuesday, before paring gains back as the market entered the New York session.
This follows US employment cost index data (a measure of labor costs) recording an increase of 1.0% in the fourth quarter from 1.2% in the previous quarter, signaling continued downward pressure on prices in the US.
However, it is not seen to affect the Fed's decision in setting interest rates further.
The Canadian dollar was among the strongest currencies erasing all USD gains following Canadian gross domestic product (GDP) data which met expectations by growing 0.1% in November.
Meanwhile, the euro erased some of the losses recorded from the USD's rise after European Zone GDP data showed the economy grew at an annual rate of 1.9% in the fourth quarter, better than the market's 1.8% growth expectation.
The pound remained weak amid market caution ahead of the Bank of England (BOE) meeting on Thursday.
At the same time, investors also focused on the development of post-Brexit negotiations between the European Union (EU) and the UK.
On the other hand, the Aussie dollar rose slightly while the kiwi dollar fell following disappointing New Zealand employment data last quarter.
