The U.S. dollar recovered in early Asian trading on Thursday, ahead of interest rate decisions expected later in the day from both the European Central Bank (ECB) and the Bank of England, which are widely anticipated to keep rates unchanged.
The dollar index, which measures the U.S. currency against a basket of six major currencies, rose 0.2% to 96.671 after trading near a two-week high earlier.
The euro stood at $1.1800 ahead of the ECB’s decision, which is expected to leave interest rates unchanged. Investors’ focus will be on the press conference following the policy announcement to assess interest rate expectations for the coming months.
Sterling was little changed at $1.3650 ahead of the Bank of England’s monetary policy decision, which is also expected to keep rates on hold.
The dollar reached 156.92 yen as Japan’s election campaign entered its final stage ahead of Sunday’s vote.
The dollar has gained some strength this week as financial markets assess the U.S. corporate earnings season.
At the start of the Asian session, Federal Reserve Governor Lisa Cook said she is more concerned about slowing progress on tackling inflation than about weakness in the labor market, a strong signal that she would not support another rate cut until price pressures stemming from tariffs begin to ease.
According to CME’s FedWatch Tool, futures pricing indicates a 90.6% probability that the U.S. Federal Reserve will keep interest rates unchanged at its next two-day meeting ending on March 18, unchanged from the previous day.
The dollar fell 0.1% against the offshore Chinese yuan in Hong Kong to 6.9386 following a phone call between U.S. President Donald Trump and Chinese President Xi Jinping. The two leaders discussed trade, security issues, and U.S. arms sales to Taiwan.
The Australian dollar rose 0.1% to $0.70045 after trade balance data came in slightly above market expectations, while the New Zealand dollar also gained 0.1% to $0.60045.
Cryptocurrencies stabilized after a sell-off that pushed digital assets to their lowest levels since November 2024. Bitcoin rose 0.2% to $72,745.23, while Ether climbed 1% to $2,146.63.
Reuters
