The U.S. dollar traded mixed against the most major currencies after the U.S. economic data. The U.S. producer price index (PPI) was flat in August, missing expectations for a 0.1% rise, after a 0.1% gain in July.

The U.S. PPI excluding food and energy increased 0.1% in August, in line with expectations, after a 0.2% gain in July.

The euro traded mixed against the U.S. dollar. The ZEW economic sentiment index for Germany declined to 6.9 in September from 8.6 in August, beating expectations for a drop to 5.2.

Eurozone's ZEW economic sentiment index dropped to 14.2 in September from 23.7 in August, missing forecast of a decrease to 21.3.

The British pound traded higher against the U.S. dollar, recovering its early morning losses. The U.K. consumer price index (CPI) increased 0.4% in August, in line with expectations, after a 0.3% decrease in July.

On a yearly basis, the U.K. CPI fell to 1.5% in August from 1.6% in July, in line with expectations.

The U.K. core CPI excluding food, energy, alcohol and tobacco increased to 1.9% in August from 1.8% in July, beating forecasts of a 1.8% rise.

Scotland's independence referendum on Thursday continued to weigh on the pound.

The Canadian dollar traded higher against the U.S. dollar after the better-than-expected Canadian manufacturing shipments. The Canadian manufacturing shipments climbed 2.5% in July, exceeding expectations for a 1.1% rise, after a 0.9% gain in June. June's figure was revised up from a 0.6% increase.

The New Zealand dollar traded mixed against the U.S dollar in the absence of any major economic reports from New Zealand. Market participants are awaiting Wednesday morning's dairy auction on Fonterra's online platform, GlobalDairyTrade.

The Australian dollar traded higher against the U.S. dollar. In the overnight trading session, the Aussie declined against the greenback after the release of the Reserve Bank of Australia's meeting minutes. The Reserve Bank of Australia reiterated it will keep interest rates unchanged for an extended period of time. The central bank added the Aussie is "above most estimates of its fundamental value".

The RBA also said "housing prices were continuing to increase in the larger cities".

The RBA assistant governor Christopher Kent said at the Bloomberg Economic Summit in Sydney on Tuesday that the weaker Aussie provides would support local business.

The Japanese yen traded mixed against the U.S. dollar in the absence of any major economic reports from Japan.

The Bank of Japan (BoJ) Governor Haruhiko Kuroda said at a meeting of business leaders in the Kansai region today that the BoJ will add fresh easing measures if needed to achieve its 2% inflation target. Mr. Kuroda added Japan's economy will continue to recover moderately and the inflation target of 2% will be achieved as expected.