The US dollar remained weak in the European session with prices moving flat around one -week lows against major currencies.
The European trading session was adorned with the publication of UK inflation data which continued to show an increase in June by hitting a new 40 -year high of 9.4%.
However, the pound failed to react higher following the data, seeing it continue to trade at around 1.2000 against the US dollar.
Earlier, the Governor of the Bank of England (BOE) had informed that an interest rate hike of 50 basis points might be considered at its policy meeting next month.
Market sentiment was again affected by reports of China recording more than 1000 Covid-19 cases on Wednesday, causing investors to worry that authorities will introduce additional sanctions measures.
This had little impact on risk -sensitive currency trading, dampening the gains recorded by the Aussie dollar and kiwi.
Still, the stance of the Australian and New Zealand central banks to continue aggressive action in raising interest rates, helped support the two currencies rather than extinguish profits.
The rise of the euro also stalled, but remained traded higher supported by expectations for a higher -than -expected rate hike by the European Central Bank (ECB).
The Canadian dollar also strengthened as investors' focus now shifted to Canadian inflation data that will be released in the New York session later.
