Dollar recovers as central bank decisions loom

The dollar steadied at the start of Asian trade on Thursday ahead of interest rate decisions from the European Central Bank and the Bank of England, both of which are expected to keep rates on hold later in the global day.

The US dollar index, which measures the greenback's strength against a basket of six currencies, was up 0.2% at 96.671, having traded near a two-week high earlier.

The euro was steady at $1.1800 ahead of the European Central Bank decision, where it is expected to keep rates on hold. Investors' attention will be focused on the post-policy press conference to gauge the outlook for rates over the coming months.

"The emphasis will likely be on higher uncertainty," with only minor tweaks in communication, according to analysts from Bank of America, who expect the ECB to hold rates later in the day. "Our conviction in a March cut is not rock solid, but we remain convinced of an easing bias from here."

The British pound was flat at $1.3650 ahead of the Bank of England's policy decision, at which it is also expected to remain on hold.

Against the yen, the US dollar was fetching 156.92 yen, keeping steady as Japan's election campaign enters its final stretch ahead of Sunday's poll.

The dollar has gained some strength this week as financial markets assess US corporate earnings season, now halfway complete, and stocks turn risk-off.    �"Reuters