The British pound rallied as much as 2.7 percent against the USA dollar to hit its highest level since early October after British Prime Minister Theresa May surprised markets by calling for an early parliamentary election.
In the UK, the Pound had earlier got a lift after Theresa May, the UK Prime Minister, called for a June election.
Polls have for months shown far-right leader Marine Le Pen and Macron qualifying this Sunday for the May 7 run-off, but it remains a contested, four-way vote with conservative Francois Fillon and far-left candidate Jean-Luc Melenchon.
The Pound has been rising strongly against the New Zealand Dollar as it maintains its uptrend.
Germany's DAX was unchanged at around the 12,000-point mark, and Britain's FTSE 100 fell a further 0.2 per cent following Tuesday's 2.5 per cent slide, its biggest fall since June a year ago.
Earlier, the pan-European FTSEurofirst 300 index lost 1.21 percent and MSCI's gauge of stocks across the globe shed 0.40 percent.
The Japanese yen strengthened 0.36 percent versus the greenback at 108.52 per dollar, while sterling GBP= was last trading at $1.2844, up 2.25 percent on the day.
U.S. Vice President Mike Pence said on Wednesday that Washington would work with its allies and China to put economic and diplomatic pressure on North Korea after its failed missile test over the weekend.
Australian shares .AXJO slipped 0.8 percent on their first trading day this week.
"You can see that reflected in the U.S. yield curve, as rates moved a bit higher after release of the Beige Book", he said, referring to the U.S. Federal Reserve's periodic report on the economy.
Elsewhere, weaker than expected economic data weighed on the dollar, after USA home building fell by more than expected in March. US homebuilding fell in March, and manufacturing output dropped for the first time in seven months.
US crude fell 0.49 percent to $52.39 per barrel and Brent was last at $54.88, down 0.87 percent on the day.
Safe-haven bonds dipped slightly but largely held onto most of their recent gains before presidential elections in France and on escalating tensions between the United States and North Korea.
Benchmark 10-year notes US10YT=RR last rose 20/32 in price to yield 2.1824 percent, from 2.252 percent late on Monday.
Despite these tensions, Wall Street posted its first session of gains in four, as investors turned their attention to first-quarter corporate earnings.
Japan's Nikkei managed to steady for the moment, but Shanghai extended its recent retreat with a drop of 1 percent.