Investing.com - The dollar was holding above one-year lows against the yen on Thursday as oil prices gave up modest early gains, and the euro remained supported ahead of the European Central Bank policy announcement later in the day.
USD/JPY was trading at 116.88, off overnight lows of 116.47 and holding above the one-year low of 115.95 set on Wednesday.
Oil prices slid again on Thursday, re-approaching the 12-year lows hit in Wednesday’s session as a global supply glut continued to pressure prices.
The dollar weakened against the safe haven yen on Wednesday as the plunge in oil prices added to fears over slowing global growth.
In the U.S., data on Wednesday showed that consumer prices unexpectedly fell in December, indicating that inflation could struggle to rise back towards the Federal Reserve’s 2% target.
Another report showed that U.S. housing starts and building permits fell last month, prompting investors to push back expectations for additional rate hikes this year.
The euro held steady, with EUR/USD at 1.0895, off Wednesday’s highs of 1.0975.
Most analysts expect the ECB to keep policy on hold on Thursday, but the central bank is expected to flag risks to the growth and inflation outlook, in particular from falling energy prices, leaving the way clear for additional easing later this year.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at 99.14, little changed for the day.