- The dollar was almost unchanged against the euro on Thursday as markets treaded water ahead of the European Central Bank’s rate review and press conference later in the session.

EUR/USD edged down 0.01% to 1.3764, 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.

Sentiment on the single currency received a boost after data on Thursday showed that euro zone retail sales rose 0.4% in February, compared to expectations for a 0.6% decline.

The dollar was holding close to ten-week highs against the yen, with USD/JPY edging up 0.08% to 103.95.

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 slipped lower against the dollar, with GBP/USD down 0.19% to 1.6593, after data showed that while the U.K. service sector continued to expand steadily in March the rate of expansion was the slowest in nine months.

The Markit/CIPS services purchasing managers index ticked down to 57.6 last month from 58.2 in February. Analysts had expected the index to decline to 58.1.

The index remained well above the 50 level that separates growth from contraction and signaled another month of robust growth in the sector, which comprises more than three-quarters of the U.K. economy.

Elsewhere, USD/CHF inched up 0.04% to 0.8868.

The Australian dollar was lower, with AUD/USD down 0.21% to 0.9228, 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 0.48% to 0.8531, extending its pullback from the two-and-a-half year peaks of 0.8696 struck on Tuesday.

Meanwhile, USD/CAD slipped 0.19% to 1.1011.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was almost unchanged at 80.41.

Please LIKE our Facebook page - it makes us stronger