The euro held steady versus the dollar on Wednesday as investors priced in a higher likelihood of an ECB rate hike due to rising inflation in Germany and Spain. Meanwhile, information on the U.S. labor market arriving later this week is expected to provide guidance on the Federal Reserve's rate-setting course.

Releases of inflation data for Spain and Germany may provide some insight into the wider figures for the bloc anticipated on Thursday.

North Rhine-Westphalia (NRW), saw inflation increase from 5.8% in July to 5.9% in August, confirming predictions that the ECB's tightening cycle might continue for some time.

Consumer prices increased 2.6% in Spain in August compared to 2.3% in July, which was in line with the 2.6% forecasted by Reuters' poll of analysts.

Money markets increased their bets on an ECB rate increase in September, pricing in a 60% likelihood of a 25 basis-point change.

The odds that the Fed will maintain rates on September 20 are currently 86.5%, but the chances that rates will increase at the next meeting in November are almost equally likely.

After inflation data, markets increase their expectations of an ECB rate increase, keeping the euro steady.