The dollar edged higher against rival currencies on Thursday, as investors focus their attention on the European Central Bank’s (ECB) policy review meeting slated in the day.
EUR/USD shed 0.17% to trade lower at 1.0981.
Analysts expect the ECB to announce a new set of measures that will help address deflation in the euro area, after consumer price inflation dipped to negative territory again in February, falling by 0.2% as opposed to inflation targets of less than 2%.
Among other measures, the ECB is widely expected to cut interest rates even deeper, which are currently in negative territory at minus 0.3%. The bank is also expected to ramp up its asset purchasing program, possibly pumping in an estimated €60 billion a month into the euro economy.
Unlike analysts, however, investors aren’t as optimistic as the ECB disappointed market players back in December after the bank failed to adopt additional quantitative easing measures.
USD/JPY tacked on 0.09% to trade at 113.44.
The American currency was steady against the pound and the Swiss franc, with GBP/USD trading at 1.4217 and with USD/CHF holding at 0.9965.
Against the Australian dollar, the greenback was higher, with AUD/USD falling 0.11% to trade at 0.7467.
NZD/USD was up on Thursday, rising 0.27% to trade at 0.6771.
The kiwi recovered after the Reserve Bank of New Zealand uncharacteristically lowered its benchmark interest rate to 2.25% from 2.50%, indicating the likelihood for additional rate cuts in the future.
USD/CAD climbed 0.22% to trade higher at 1.3276.
The U.S. dollar index was up 0.11% on Thursday at 97.30.