Investing.com - The greenback traded steady to lower against most major currencies on Thursday, buoyed by U.S. weekly jobless claims data though pressured lower by the European Central Bank's decision to forgo loosening monetary policy this month.
In U.S. trading on Thursday, EUR/USD was up 0.40% at 1.3587.
The European Central Bank earlier voted to leave interest rates across the euro zone unchanged at a record-low 0.25%, but the common currency strengthened after ECB President Mario Draghi did not outline any new measures to shore up slowing inflation.
Draghi said the ECB sees a protracted period of low inflation, not full blown deflation, and reiterated that the bank is “monitoring developments closely" and won't likely make any decisions until the bank reviews more economic indicators, which markets interpreted as March at the earliest.
Deflationary concerns arose last week after data revealed that the annual rate of inflation slowed to 0.7% in January, which stoked expectations the ECB would either trim rates, roll out new stimulus measures or leave policy unchanged but accompany it with dovish language.
The news sent the euro rising over the dollar.
Meanwhile in the U.S., the dollar found some support after data revealed that the number of individuals filing for unemployment assistance in the U.S. fell more than expected last week.
The Labor Department said initial jobless claims fell by 20,000 to 331,000 from the previous week’s revised total of 351,000. Analysts were expecting jobless claims to fall by 16,000.
A separate report showed that the U.S. trade deficit widened significantly in December, as exports dropped 2.2% and imports rose 1.6%.
The numbers rekindled perceptions that the U.S. economy continues to recover and is in less need of Federal Reserve stimulus tools such as bond purchases, which weaken the dollar to spur recovery.
Investors were turning their attention to Friday’s U.S. nonfarm payrolls report for January, after poor U.S. manufacturing data earlier in the week sparked concerns over a possible slowdown in the economic recovery.
Growing sentiments that harsh winter weather may be bruising economic indicators and not waning demand gave the dollar some support as well.
The dollar was up against the yen, with USD/JPY up 0.63% at 102.09, and down against the Swiss franc, with USD/CHF down 0.30% at 0.9008.
The greenback was down against the pound, with GBP/USD up 0.08 at 1.6322.
The dollar was down against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.14% at 1.1068, AUD/USD up 0.58% at 0.8962 and NZD/USD up 0.52% at 0.8256.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.20% at 80.99.