The US dollar fell sharply against its major counterparts on Wednesday, as risk appetite sharpened pushing up the higher yielding currencies.

EUR/USD rose 1.33 percent to hit 1.4524 during European after trade, supported by Spain's long term treasury auction.

Spanish treasury on Wednesday sold 3.37 billion euro ($4.8 billion) worth of 2021 and 2024 bonds, easing concerns over fiscal stability in the EU peripherals.

GBP/USD was up 0.42 percent to hit 1.6382, despite the Bank of England (BoE) Monetary Policy Committee (MPC) meeting minutes showed that majority of the members favored no change to the lending rates.

The BoE said that six policymakers voted in favor of maintaining the interest rates at record low of 0.5 percent, while three members voted against the proposition.

However, the policymakers said that there remained a significant risk that inflation would exceed 5 percent in the near term.

“Uncertainty around Q1 GDP remains elevated and we continue to expect the MPC to remain on hold until November,” said a note RBC Capital Markets.

Meanwhile, the Canadian dollar hit its highest level since November 2007 against the US dollar, with USD/CAD dropping to 0.9498. Traders said that the pair has a strong demand at 0.9500 level.

Also, annual consumer price index (CPI) in Canada increased 3.3 percent in March, the largest increase since September 2008, Statistics Canada said on Tuesday.

Given the faster than expected growth and inflation in Canada and the US recently, the Bank of Canada (BoC) may be forced to reconsider its highly accommodative monetary policy posture and consider normalization while it is still in front of the curve,” said a note from BNY Mellon on Wednesday.

The greenback was also lower against the Aussie and Kiwi, with AUD/USD climbing 1.36 percent to hit 1.0669 and NZD/USD jumping 1.32 percent to 0.7990.

Earlier on Wednesday, an official data showed that export prices in Australia rose faster than import prices, raising speculations over the interest rate hike by the country’s central bank.

The Reserve Bank of Australia (RBA) kept the interest rate unchanged at 4.75 percent in April, saying that the current economic policy is appropriate and inflation will be in line with targets in the year ahead.

The dollar was also lower against the Swiss franc, with USD/CHF losing 0.97 percent to trade at 0.8909.

However, the dollar traded higher against the Japanese yen, with USD/JPY easing up 0.14 percent to trade at 82.70.

The Japanese finance ministry said on Wednesday that exports from the nation fell 2.2 percent in March year-on-year, due to disruptions from last month’s devastating earthquake and tsunami. The decline in exports was the first in 16 months.

Besides, traders are likely to sell the Japanese yen at 82, a key level at which G-7 nations intervened in the currency markets in March, to weaken the yen, Euro Exchange Rate News reported on Tuesday.

G-7 nations intervened for the first time in currency markets since 2000 in March to weaken the surge of yen, after a devastating earthquake in Japan led yen to reach all-time high of 76.53 against the US dollar on March 17.

The dollar index, a measure of performance of the greenback against a basket of six major currencies, plunged 0.96 percent to reach a 16-month low.