Investing.com - The dollar held steady near five-and-a-half year highs against a basket of other major currencies on Thursday, as investors remained cautious ahead of policy statements by the Bank of England and the European Central Bank due later in the day.
The yen hit fresh seven-year lows against the dollar on Thursday, after Japanese media outlets reported that Prime Minister Shinzo Abe's coalition government could retain its majority in the lower house of parliament in elections due to be held on December 14.
USD/JPY touched highs of 119.98, the most since July 2007 and was last at 119.95, up 0.13% for the day.
Abe dissolved parliament earlier this month, clearing the way for elections to seek a fresh mandate for his economic policies, which call for a weaker yen. The decision came after Japan’s economy unexpectedly fell into recession in the third quarter.
The yen has weakened broadly since the Bank of Japan unexpectedly expanded its stimulus program in late October. In contrast, the Federal Reserve wound up its asset purchase program in October and is expected to start raising interest rates around September 2015.
EUR/USD was almost unchanged near two-year lows at 1.2316.
Persistently low levels of inflation and a faltering economic recovery have added to pressure on the ECB to step up measures to spur growth. The bank was expected to stop short of announcing quantitative easing measures but could extend its program of asset purchases.
Surveys of euro zone private sector activity on Wednesday indicated that the region would post only marginal economic growth in the fourth quarter.
The pound was also steady, with GBP/USD at 1.5679, while USD/CHF eased 0.08% to trade at 0.9768.
The Australian dollar fell to fresh four-year lows, with AUD/USD down 0.36% to 0.8373 even as official data earlier showed that Australian retail sales rose 0.4% in October, more than the expected 0.1% gain.
A separate report showed that Australia's trade deficit narrowed to A$1.132 billion in October from A$2.23 billion in September, whose figure was revised from a previously estimated deficit A$2.26 billion.
Elsewhere, NZD/USD slipped 0.20% to 0.7746 and USD/CAD held steady at 1.1365.
The U.S. dollar index, which measures the greenback against a basket of six major currencies, was steady 88.99, the strongest level since May 2010.
Later in the day, the U.S. was to release the weekly report on initial jobless claims.