Investing.com - The dollar was steady against the euro and the yen on Thursday as calm returned to global equity markets after recent selloffs trigged by fears over the impact of slowing growth in China on the global economy.
EUR/USD was trading at 1.1232, little changed for the day after ending the previous session down 0.82%.
The dollar remained supported following strong overnight gains on the back of a rally in Wall Street.
Japan’s Nikkei ended higher on Thursday as overnight gains on Wall Street and a market holiday in China supported risk appetite.
USD/JPY was last at 120.37, after rising to overnight highs of 120.69.
The dollar’s gains were held in check ahead of Friday’s U.S. jobs report for August, which investors hoped would provide clarity on the likelihood of a near-term interest rate hike by the Federal Reserve.
Recent turmoil in global financial markets has raised doubts over whether the Fed will hold off hiking interest rates from record lows at its upcoming policy meeting on September 17.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was firm at three-day highs of 95.92.
The worsening outlook for global growth had boosted demand for the low yielding euro and yen in recent sessions.
Investors often use low-yielding currencies to fund positions in higher-yielding currencies and equities, known as carry trades.
Investors were looking ahead to the European Central Bank’s policy meeting later Thursday, with the bank expected to cut its inflation forecast due to ongoing falls in oil prices and slowing growth in China.
The bank was expected to keep interest rates unchanged.