Commodity-dependent currencies like the Aussie and kiwi fell on Wednesday as Chinese stocks slid, while trade data from Japan hinted at a recession approaching the world's third-largest economy.
The yen dipped against the dollar and the euro after Japanese exports showed at the slowest pace of growth since mid-2014 mainly due to weakness in China. That also raised chances of more quantitative easing from the Bank of Japan.
USD/JPY was last at 119.92, up 0.05%, while EUR/JPY traded at 136.19, up 0.14%.
The Australian dollar, which is used as a more liquid proxy for Chinese investments because of Australia's strong trade links to China, dipped 0.57% to $0.7218, while the New Zealand dollar fell 0.33% to trade at $0.6730.
The drop came as the Shanghai Composite closed more than 3 percent lower. Other emerging market stocks also fell after recent data pointed to a dim growth outlook.
European stock markets got rid of initial gains in the London session, with Europe's benchmark gauge falling 0.2%.
Elsewhere in the currency trading, the euro was up 0.18% to $1.1365, adding to Tuesday's gains.
Traders believe the euro will suffer from modest volatility ahead of the ECB policy meeting on Thursday. While the ECB is not likely to ease this month, investors expect the central bank to hint at more stimulus later this year.
Data released on Tuesday showed that euro area banks had loosened their lending standards more than expected over the last few months despite volatility in the global markets. That slashed the need for the ECB to expand its 1 trillion euro asset purchase program.
Meanwhile, the Canadian dollar fell with USD/CAD last up 0.17% to 1.3005. The main focus is now on the Bank of Canada's policy decision due on Wednesday with most analysts predicting the policy to stay unchanged.
Credit: mql5.com
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