The dollar traded lower against most major currencies on Wednesday as investors flocked to the euro after German Finance Minister Wolfgang Schauble said markets may have branded recent comments out of the European Central Bank as overly dovish.

In U.S. trading on Wednesday, EUR/USD was up 0.20% at 1.3194.

The single currency strengthened after German Finance Minister Wolfgang Schauble said comments made by European Central Bank President Mario Draghi Draghi suggesting fiscal policy could spur growth were "overinterpreted."

Draghi said last week that the policy makers are ready to take more unconventional action if needed to stimulate a sluggish euro zone economy, which left many pondering the possibility that fiscal stimulus could accompany loose monetary policies to jumpstart European recovery.

Elsewhere, data revealed that the Gfk German consumer climate index fell to 8.6 this month from 9.0 in July. Analysts had expected the index to remain unchanged in August, though Schauble's comments served as the pair's chief steering current.

Profit taking, meanwhile, also nudged the dollar lower.

The dollar advanced in recent sessions due to upbeat economic indicators and optimistic comments from Federal Reserve Chair Janet Yellen.

Investors also avoided the greenback ahead of a flurry of economic indicators due out on Thursday.

On Thursday, markets will move on U.S. gross domestic product data, weekly initial jobless claims and a report on pending home sales, with investors hoping the indicators will shed light on the pace of U.S. recovery as well as the future of monetary policy.

Elsewhere, Ukraine continued to accuse Russian forces of crossing its border one day after leaders from both countries agreed to find ways to end the separatist war raging in the eastern reaches of the country.

Geopolitical tensions often weaken the dollar by stoking concerns that military conflicts will drag on the global economy and dampen U.S. recovery.

The dollar was down against the yen, with USD/JPY down 0.16% at 103.90, and down against the Swiss franc, with USD/CHF down 0.29% at 0.9148.

The greenback was down against the pound, with GBP/USD up 0.21% at 1.6576.

The dollar was down against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.89% at 1.0855, AUD/USD up 0.35% at 0.9338 and NZD/USD up 0.52% at 0.8377.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.26% at 82.48.

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