In morning European trade, the single currency rose to 1.3747 dollars, from 1.3736 dollars in New York late on Tuesday.

The dollar climbed to 119.24 yen, from 118.82 yen.

The euro rose amid data that showed Germany's trade surplus with the rest of the world shrank by 4.8 percent in June from May to 16.5 billion euros (22.7 billion dollars).

Analysts had forecast a rise to 18 billion euros for the eurozone's biggest economy.

"In the eurozone, it continues to be all good news on the external front for Germany," said CIBC economist Audrey Childe-Freeman.

The dollar meanwhile edged up against the yen after the Federal Reserve dampened expectations of a US interest rate cut and Japanese machinery orders fell sharply, dealers said.

They added that a decision by Australia's central bank to hike interest rates to a decade-high level of 6.5 percent boosted the local dollar, as the currency became more attractive to investors even as they grew less risk averse.

A much bigger-than-expected 10.4 percent slump in Japanese core machinery orders in June prompted players to unload the yen, said Toru Sasaki, chief foreign exchange strategist at JPMorgan Chase Bank.

Dealers said the sharp drop would make it harder for the Bank of Japan to justify raising its super-low interest rates from 0.50 percent in the face of political resistance to further monetary tightening.

The dollar was also supported by hawkish comments from the Fed on inflation that reduced expectations of a cut in US interest rates any time soon.