Investing.com - The euro edged higher against the dollar on Thursday, but remained within striking distance of two-year lows as markets awaited the European Central Bank’s policy announcement later in the day.
EUR/USD was up 0.19% to 1.2507, not far from Monday’s two year lows of 1.2437.
Investors were awaiting the outcome of the ECB meeting later Thursday after the Bank of Japan’s surprise stimulus move on Friday fuelled expectations that it will soon follow suit.
Most analysts were expecting the ECB to keep interest rates on hold at record lows and to refrain from implementing any new easing measures.
However markets were seeking assurances that the central bank remains prepared to implement additional stimulus measures if necessary, in order to spur growth and inflation in the euro area.
The bank’s latest policy announcement was given extra significance following recent reports of tensions within the ECB over President Mario Draghi’s leadership.
Earlier Thursday, data showed that German factory orders rose just 0.8% in September, well below forecasts of a 2.3% increase.
The weak data fuelled concerns over the outlook for the euro area’s largest economy.
The single currency was also slightly higher against the yen, with EUR/JPY easing up 0.13% to 143.36.
Elsewhere, the dollar was almost unchanged against the yen, with USD/JPY at 114.42, holding below the highs of 115.52 struck overnight, the most since November 2007.
The dollar rallied on Wednesday, climbing to seven year peaks against the yen, following gains by Republicans in the U.S. mid-term elections and a strong private sector jobs report.
The ADP nonfarm payrolls report showed that the U.S. private sector added 230,000 jobs in October, ahead of expectations for jobs growth of 220,000.
Separately, the Institute of Supply Management said that its non-manufacturing index slowed to 57.1 last month from 58.6 in September.
However, the employment component of the index rose, boosting the outlook for the labor market ahead of Friday’s U.S. nonfarm payrolls report.