The euro rose against the dollar here on Thursday as traders awaited an interest rate decision from the European Central Bank.
Ahead of the ECB decision on eurozone borrowing costs, the Bank of England was to announce its own latest monthly call on British interest rates.
In late morning trade here, the European single currency climbed to 1.2856 dollars from 1.2847 dollars in New York late on Wednesday.
Against the Japanese currency, the dollar increased to 89.81 yen from 89.42 yen on Wednesday.
The ECB was widely expected to keep the level of its key lending rate at 2.0 percent when making a formal announcement at 1245 GMT.
"Although the ECB always insists that it never pre-commits, that is exactly what President (Jean-Claude) Trichet did after the January meeting by stating that the next important meeting in regard to monetary policy would be in March, not February," said Derek Halpenny, European Head of Global Currency Research at The Bank of Tokyo-Mitsubishi UFJ.
"The foreign exchange market like all other markets has acknowledged that with little expectations for a rate cut today," added the analyst.
Elsewhere, the Bank of England was expected to reduce its key lending rate by 50 basis points to 1.0 percent on Thursday, bringing its monetary policy closer to its US and Japanese counterparts, which have near-zero rates.
Lower interest rates can make a currency less attractive for investors seeking the highest yields.
The euro had meanwhile been pressured in Asian trade on Thursday by the economic woes of eastern Europe, which could hit banks in the rest of the region, dealers said.
Fitch Ratings slashed Russia's debt rating Wednesday in light of falling commodities prices and foreign exchange reserves.
The ruble plunged to an 11-year low of a little more than 36 rubles to the dollar earlier this week.
In London trade on Thursday, the euro changed hands at 1.2856 dollars against 1.2847 dollars late Wednesday, at 115.56 yen (114.89), 0.8889 pounds (0.8879) and 1.4912 Swiss francs (1.4881).
The dollar stood at 89.81 yen (89.42) and 1.1595 Swiss francs (1.1581).
The pound was at 1.4478 dollars (1.4467).
On the London Bullion Market, the price of gold rose to 911.74 dollars an ounce from 905 dollars late on Wednesday.
