Dollar Down With Investors Looking to Thursday’s ECB Meeting

The dollar was down on Thursday morning in Asia, ahead of the European Central Bank (ECB) meeting taking place later in the day.

The U.S. Dollar Index that tracks the greenback against a basket of other currencies edged down 0.10% to 93.165 by 11:54 PM ET (4:54 AM GMT).

The euro held onto gains against the greenback ahead of the meeting, with the meeting’s agenda expected to focus on policymakers’ views on the euro’s recent appreciation and its impact on inflation. Although ECB is widely expected to keep its policies unchanged, investors are looking to President Christine Lagarde’s comments on the subject to gauge the outlook for inflation and economic growth.

“The ECB is this week’s biggest event by far and there is a lot at stake,” Sumitomo Mitsui (NYSE:SMFG) Banking Corporation joint general manager of trading Masaru Ishibashi told Reuters.

“Most recently, the ECB downplayed inflation, but I want to see how Lagarde will approach this in her press conference. This will determine which way the euro goes,” he added.

Although the euro saw an uptick on the back of reports that ECB officials continue to be confident of the E.U.’s economic outlook, concerns over the single currency’s almost 6% appreciation against the dollar from its June low could see the rate slow down.

The USD/JPY pair inched down 0.06% to 106.11.

The AUD/USD pair edged down 0.19% to 0.7268, with Victoria state monitoring an outbreak of infections, while the NZD/USD pair inched up 0.01% to 0.6682.

The USD/CNY pair edged up 0.11% to 6.8384.

The GBP/USD pair inched down 0.05% to 1.2994. The U.K. on Wednesday unveiled draft legislation that increased the possibility of a no-deal Brexit in four months’ time. The mounting concerns could spell more losses for the pound, which steadied above the six-week low reached during the previous session.