The greenback dipped lower on Wednesday, amid trade disruptions during the Trump administration that shook confidence in the U.S. economy, the dollar suffered losses, while the sterling edged higher despite underwhelming inflation data.

The dollar index that gauges the greenback versus the major pairs dropped 0.5% to 99.452, It has declined by more than 8% since the beginning of the year.

The U.S. dollar continued to decline after the Trump administration introduced fresh measures in its trade dispute with China, the world's two largest economies.

President Donald Trump has started an investigation into new tariffs on critical mineral imports to the U.S., most of which come from China, as part of his trade changes.

Earlier this month, Trump escalated the trade conflict with China by increasing tariffs to a total of 145%. In response, China imposed a 125% tariff on U.S. products.

EUR/USD added 0.7% to 1.1364, the euro is gaining support again after retreating from last week's climb to a three-year high of 1.1474.

GBP/USD edged up by 0.5% higher to 1.3283, despite U.K. inflation easing in March, the currency remains close to a six-month high, increasing the chances that BOE will lower interest rates in its upcoming May meeting.

USD/JPY dipped 0.5% lower to 142.49, the yen remains strong, supported by continued demand for safe-haven assets.