The dollar was lower against the yen on Thursday as investors turned their attention to Friday’s U.S. nonfarm payrolls data, while the euro firmed up after initially dropping in the wake of remarks by European Central Bank President Mario Draghi.
USD/JPY fell to session lows of 104.58, and was last down 0.24% to 104.61.
Market participants were looking to the December U.S. jobs report for indications on the timing of further reductions to the pace of the Federal Reserve’s stimulus program.
Wednesday’s minutes of the Fed’s December meeting showed that the bank cited a stronger labor market in its decision to cut its asset purchase program by USD10 billion, reducing it to USD75 billion-a-month.
The minutes also showed that officials were keen to stress that further reductions were not on a “preset course” and would be undertaken in “measured” steps.
The minutes came on the heels of a report showing that the U.S. private sector added the largest number of jobs since November 2012 last month.
In a report released on Thursday, the Labor Department said the number of people who filed for unemployment assistance in the U.S. last week fell by 15,000 to 330,000 from the previous week’s revised total of 345,000.
Economists had expected jobless claims to decline by 10,000.
Elsewhere, EUR/USD edged up 0.10% to 1.3588, recovering from lows of 1.3549, the weakest level since December 5.
The drop in the euro came after ECB President Mario Draghi “strongly” reiterated the bank’s forward guidance on rates, saying monetary policy will remain accommodative for as long as necessary.
Draghi said the ECB was ready to take "further decisive action" if there was unwarranted short term tightening in the money markets, or if the outlook for inflation worsened in the medium term. The ECB would consider "all possible instruments" to tackle these contingencies, he added.
The euro area may experience a prolonged period of low inflation, Draghi said, before adding that the ECB expects inflation to remain around current levels during the coming months.
The comments came after the ECB left interest rates on hold at 0.25%, in a widely anticipated decision.
The dollar was slightly lower against the pound, with GBP/USD easing up 0.12% to 1.6466, and was down against the Swiss franc, with USD/CHF falling 0.30% to 0.9084.
Sterling showed little reaction after the Bank of England left rates on hold at 0.5% earlier, and announced no change to the size of its GBP375 billion asset purchase program.
AUD/USD was down 0.17% to 0.8882 and NZD/USD lost 0.24% to trade at 0.8245.
Elsewhere, the U.S. dollar advanced to four-year highs against the Canadian dollar, with USD/CAD climbing 0.29% to 1.0851.
The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, slipped 0.07% to 81.15.
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