The greenback was close to one-week low on Wednesday, as traders anticipate that today's US consumer price data will likely support the Fed's plan to reduce interest rates next month, the British pound has softened following inflation figures that came in below expectations.

Traders remained generally cautious before the release of U.S. inflation figures. The report is predicted to indicate a 0.2% rise in CPI for July compared to the previous month and 0.1% decrease.

The dollar index that gauges the greenback versus its major pairs, slipped by 0.1% to 102.52, post dropping 0.5% on Tuesday when weaker beyond predicted edged up in producer prices buoyed by September’s rate cut.

The sluggish dollar supported the euro that touched the highest level in seven months at $1.1010,

The dollar's weakness helped the euro hit a seven-month high of $1.1010, exceeding the peak reached during the market turmoil on August 5.

GBP/USD dipped 0.2% to $1.28415, following British CPI that rose in July, however the raise not as significant as anticipated because the prices for services, which are closely monitored by the BoE, grew at a slower rate.

NZD/USD slumped over 1% after the RBNZ lowered its key cash rate and indicated that further reductions are on the horizon, marking a significant shift towards a more dovish stance.