Investing.com – The U.S. dollar edged higher Thursday, while the euro slipped ahead of an ECB meeting and sterling dipped as U.K. wage growth slowed.
At 04:00 ET (09:00 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% higher to 103.550, bouncing after losses this week on increased optimism that the Federal Reserve will cut interest rates in September.
Dollar edges higher
has bounced Thursday after falling to its lowest level since March during the previous session.
Confidence that the U.S. Federal Reserve will start cutting interest rates at its next meeting in September, to boost a slowing economy, has weighed heavily on the greenback.
Economic data due later in the session are likely to show an increase in weekly , while the is set to indicate a slight improvement in conditions.
Sterling slips as wage growth slows
traded 0.2% lower at 1.2985, after the release of data showing that growth in British wages slowed in May, but remained at elevated levels.
Data showed that excluding bonuses – a key gauge of inflation pressure for the BoE as it considers whether to cut interest rates next month – grew by 5.7% in a three-month period ended May, compared with a year earlier.
This represented a drop from 6.0% the previous month, and resulted in money markets raising the odds of an interest rate cut next month to 39.1% from 30%.
The next meets at the start of August.
fell 0.1% to 1.0928, slipping slightly from Wednesday’s four-month peak ahead of a policy-setting European Central Bank meeting later in the session.
The central bank is widely expected to keep rates steady, after cutting in June, and thus attention will largely be on the comments from ECB President at the accompanying press conference.
“Our team concludes that the ECB will probably be happy with current market pricing of further 25bp rate cuts in September and December and will prefer not to move the needle today,” said analysts at ING, in a note.
Yen hands back some gains
In Asia, rose 0.2% to 156.47, after falling as low as 155.38 earlier.
The yen’s sharp appreciation, which saw the pair slide from nearly 162 over the past week, sparked increased speculation that the Japanese government had once again intervened in currency markets.
slipped slightly lower at 7.2586, with the pair steadying below eight-month highs.
Sentiment towards China worsened as a Bloomberg report said the U.S. was considering stricter curbs on China’s technology and chipmaking industry – a move that could draw ire from Beijing and spark a renewed trade war between the world’s biggest economies.
