Investing.com - The dollar edged higher against the euro on Thursday, ahead of the European Central Bank’s meeting later in the trading day, amid concerns that the bank may take more steps to shore up the recovery in the region.
EUR/USD edged down 0.04% to 1.3759, pulling back from the one-week highs of 1.3819 reached on Wednesday.
Recent weak euro zone inflation data has added to pressure on the ECB to take steps to stave off the risk of deflation in the region.
On Wednesday, International Monetary Fund head Christine Lagarde urged the central bank to do more to combat low inflation in the region, warning that slow price growth could undermine the fragile global recovery.
However, most investors expected the ECB to leave monetary policy on hold, after recent comments by ECB officials played down concerns over slowing inflation, indicating that it is temporary.
The dollar was holding close to ten-week highs against the yen, with USD/JPY edging up 0.05% to 103.93.
Demand for the dollar continued to be underpinned after recent data indicated that the economy is shaking off the effects of a weather related slowdown at the start of the year. Hopes that China will implement measures to bolster slowing growth also supported risk appetite.
The pound edged higher against the dollar, with GBP/USD inching up 0.09% to 1.6641, while USD/CHF inched up 0.05% to 0.8870.
The Australian dollar edged lower, with AUD/USD down 0.19% to 0.9230, pulling further back from Tuesday’s four-month high of 0.9302. Australia’s dollar shrugged off upbeat domestic retail sales and trade data as investors took profits following the currency’s recent run higher.
NZD/USD was down 0.52% to 0.8527, extending its pullback from the two-and-a-half year peaks of 0.8696 struck on Tuesday. Meanwhile, USD/CAD slipped 0.13% to 1.1019.
The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was unchanged at 80.39.
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