Early on Wednesday in European trading, the greenback steadied as investors warily anticipated the most recent U.S. inflation data. Sterling, however, fell as it was revealed that the U.K. GDP shrank more than forecast in July.

The dollar index that gauges the greenback versus its major pairs, climbed marginally to 104.377 after hitting a one-week low on Monday.

Thursday's European Central Bank meeting is underway, and traders have begun reevaluating their positions after a Reuters report revealed that policymakers estimate inflation in the 20-nation eurozone to continue above 3% in 2019. This supports the case for a tenth increase in interest rates in a row.

EUR/USD slipped 0.1% to 1.0738, retreating from the highest level in one week of 1.0777 seen in the earlier session.

GBP/USD dropped 0.3% to 1.2452, sterling was impacted by the announcement that the U.K. GDP shrank by more than anticipated 0.5% in July, the largest decline this year, as opposed to the anticipated 0.2% monthly decline.

USD/JPY edged up by 0.1% to 147.27, as markets evaluate recent remarks from Bank of Japan Governor Kazuo Ueda over whether the central bank wants to exit its negative interest rate policy in the near future, the yen is still close to 10-month lows.