Advances in US dollar trading stalled again, seeing the currency king shrink at the opening of the European session.
Against a group of major currencies, the dollar index, which measures the greenback's strength, traded lower around 101.80.
Market sentiment improved on Tuesday after data published in the Asian session showed China's economy growing stronger in the first quarter of 2023.
China's gross domestic product (GDP) grew 4.5% year-on-year in the first quarter, beating market expectations for a rise of just 4% after Covid-19 restrictions are lifted.
This in turn supported the risk-sensitive currencies of the Aussie and New Zealand dollars to bounce back from earlier falls against the US dollar.
A similar increase was seen in the euro trade which traded higher at around 1.0965 against the greenback.
The pound also rose to around 1.2423 against the US dollar as market focus turned to the release of UK inflation data on Wednesday.
Newly published employment data showed the UK unemployment rate rose to 3.8% in the three months to February.
Meanwhile, the dollar loonie remained trading stronger ahead of the release of Canadian inflation data in the upcoming New York session.
