Investing.com - The dollar was steady against the yen on Thursday, while the euro and the pound edged lower ahead of rate reviews by the European Central Bank and the Bank of England later in the session.
USD/JPY dipped 0.03% to 101.40, holding above the 11-week lows of 100.74 struck on Tuesday.
Safe haven demand for the yen continued to be underpinned in the wake of a recent selloff in emerging markets. Investors also remained cautious ahead of Friday’s nonfarm payrolls report, amid concerns over a possible slowdown in the U.S. recovery, following the release of poor manufacturing data earlier in the week.
Data released on Wednesday showed that the U.S. service sector expanded at the fastest rate in four months in January, while another report showed that the U.S. private sector added 175,000 jobs in January, below expectations for jobs growth of 180,000.
EUR/USD dipped 0.06% to 1.3524 ahead of the ECB rate announcement later Thursday, amid speculation that the bank may tighten monetary policy in order to stave off deflation and shore up the fragile recovery in the region.
Data last week showed that the annual rate of inflation in the euro zone slowed to 0.7% in January. It was the fourth consecutive month the inflation rate came in at less than 1% and was well below the ECB’s target of 2%.
The pound also edged lower against the dollar, with GBP/USD inching down 0.10% to 1.6292.
The BoE was widely expected to leave rates on hold at 0.5%, but the decision would be closely watched in case the bank updated its forward guidance on rates.
Data released on Wednesday showed that activity in the U.K.’s dominant service sector eased in January, but growth remained solid, indicating that the economic recovery is on track.
The report showed that price pressures for service firms picked up only slightly last month, giving the central bank leeway to keep policy loose for longer while the economic recovery continues.
The dollar was little changed against the Swiss franc, with USD/CHF edging up 0.03% to 0.9039.
The Australian dollar rose to three-and-a-half week highs, with AUD/USD rising 0.38% to 0.8944. The Aussie’s gains came after stronger-than-forecast data on retail sales and trade reinforced the view that the Reserve Bank would hold off on further rate cuts for now.
The New Zealand dollar edged higher, with NZD/USD inching up 0.05% to 0.8217.
The Canadian dollar also edged higher against the U.S. dollar, with USD/CAD slipping 0.10% to 1.1070.
The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, edged up 0.06% to 81.20.