The greenback dipped further on Wednesday in light of uncertainty regarding President Donald Trump's agenda, while the pound retreated following unfavourable government borrowing data.

The dollar index that gauges the greenback versus its major pairs slipped 0.1% lower to 107.755, after plunging over 1% ahead of this week

The US dollar stayed weak as traders worked to evaluate the full scale of President Donald Trump's tariff proposals and the potential strain his administration aims to impose on significant trading partners.

Trump announced Tuesday that his administration is considering a 10% tariff on Chinese imports starting Feb. 1, alongside 25% levies on goods from Mexico and Canada.

Trump also signalled plans for tariffs on European imports but has held off despite signing numerous executive orders since his inauguration on Monday.

EUR/USD ticked up to 1.0429, the euro remains weak as ECB is expected to cut interest rates more aggressively than the Fed and BOE in 2025.

GBP/USD dropped 0.1% to 1.2349, following data revealing that Britain recorded a larger-than-anticipated budget deficit in December, partly driven by increased debt interest costs.

USD/JPY slipped 0.1% to 155.69, in anticipation of the BOJ's upcoming two-day policy meeting this week.

The BOJ is expected to raise interest rates on Friday and may reaffirm its commitment to additional hikes if the economic recovery continues.