The U.S. dollar traded mixed to higher against the most major currencies after the better-than-expected ISM manufacturing purchasing managers' index (PMI). The ISM manufacturing PMI in the U.S. rose to 59.0 in August from 57.1 in July, beating forecasts of a decline to 57.0.

The euro traded mixed against the U.S. dollar. Market participants speculate that the European Central Bank (ECB) will add further stimulus measures. The ECB will released its interest rate decision on Thursday.

Investors have also concerns that sanctions against Russia would have a negative impact on the economic growth in the Eurozone.

Eurozone's producer price index fell 0.1% in July, after a 0.2% gain in June. June's figure was revised up from a 0.1% increase. Analysts had expected the producer price index to be flat.

On a yearly basis, Eurozone's producer price index dropped 1.1% in July, in line with expectations, after a 0.8% decline in June.

The British pound dropped against the U.S. dollar despite the better-than-expected construction PMI from the UK. The U.K. construction PMI increased to 64.0 in August from 62.4 in July, exceeding expectations for a decline to 61.5.

A YouGov poll weighed on the pound. A poll showed that there is a substantial shift toward Scottish independence. The "Yes" campaign (support for Scottish independence) is just six points behind the "No" campaign. Support of "No" campaign was down from 14 points in mid-August and 22 points less than a month ago, excluding undecided voters.

The Swiss franc traded mixed against the U.S. dollar. The Swiss economy stagnated in the second quarter. Switzerland's gross domestic product (GDP) rose 0.6% in the second quarter, after a 2.1% rise in the first quarter. The first quarter's figure was revised down from 2.5% gain.

On a quarterly basis, the Swiss GDP was flat in the second quarter, after a 0.5% rise in the first quarter. Analysts had expected the GDP to remain unchanged.

The New Zealand dollar declined against the U.S dollar in the absence of any major economic reports from New Zealand.

The Australian dollar dropped against the U.S. dollar after the Reserve Bank of Australia' interest rate decision. The RBA kept its interest rate unchanged at 2.50%. The RBA Governor Glenn Stevens reiterated the Aussie remains too high. He added that "accommodative monetary policy should provide support to demand and help growth to strengthen over time".

Building permits in Australia climbed 2.5% in July, exceeding expectations for a 1.7% gain, after a 3.8 decline in June. June's figure was revised up from a 5.0% fall.

Australia's current account deficit widened to A$13.7 billion in the second quarter from a deficit of A$7.8 billion in the first quarter. The first quarter's figure was revised down from a deficit of A$5.7 billion. That was the largest deficit since late 2012.

The Japanese yen declined to 7-month low against the U.S. dollar due to reform hopes. Japan's Prime Minister Shinzo Abe plans to reshuffle the cabinet. Japanese media reports said that Shinzo Abe may appoint Yasuhisa Shiozaki, member of the ruling Liberal Democratic Party, to head the health ministry in charge of reforming the Government Pension Investment Fund (GPIF).

Reuters reported last month that GPIF plans to buy more domestic stocks in its portfolio and to change the weighting of domestic stocks to more than 20% from a current 12% target.

Japan's monetary base grew 40.5% in August, missing expectations for a 43.7% rise, after a 42.7% gain in July.

Labour cash earnings in Japan increased 2.6% in July, after a 1% rise in June. June's figure was revised up from a 0.4% increase. Analysts had expected a 0.9% gain.