On Wednesday, the dollar weakens as deflation in China draws investors into risky assets. The pound falls against a stronger euro, with the focus remaining on the weakness of the economy. The ruble is at its lowest level in more than 16 months under pressure from demand for foreign currency.

The dollar weakened Wednesday after data showed that the Chinese economy slipped into deflation last month, increasing the government's chances of rolling out additional stimulus measures and encouraging investors to turn to risky assets. The dollar index - which measures the performance of the US currency compared to six others - fell by 0.1%, reducing some of the 0.47% increase recorded on Tuesday

The euro rose 0.2% to $1.0978, while the pound fell 0.1% to $1.274. European markets benefited from some relief after shares fell the day before, when the Italian government announced a surprise 40% tax on banks' windfall profits. The Ministry of Finance later softened its position, but the initial decision slashed the shares of the main eurozone lenders by 3.5%

The pound fell against the US dollar and the euro on Wednesday, remaining close to its lowest level of last week, with traders remaining cautious about the currency and focusing on the weakness of the British economy. At 1103 GMT, the pound was down 0.1% against the dollar at $1.2737 and 0.3% against the euro at 86.21 pence. The pound has fallen by more than 3% since July 13, when it reached $1.31440, its highest level since April 2022

The ruble hit a more than 16-month low on Wednesday, hampered by strong demand for foreign currencies and limited supply. The reduction of Russia's trade surplus and the widening of the budget deficit have also weighed on sentiment. At 1023 GMT, the ruble was 0.2% weaker against the dollar at 97.32, before reaching 97.48, its weakest point since March 25, 2022. It lost 0.14 to trade at 106.84 against the euro and lost 0.3% against the