By Virginia Harrison, MarketWatch
An earlier version of this report misstated the month covered by the Australian unemployment data. The report has been corrected.
SYDNEY (MarketWatch) — The dollar edged higher against the euro on Thursday ahead of a meeting of the European Central Bank, which is expected to signal an end to its brief rate-hike cycle.
The euro EURUSD -0.19% slipped to $1.4056, from $1.4093 in North American trade late Wednesday, ahead of the central bank policy meeting.
“The deadlock on Greece’s second bailout package, paired with the ongoing turmoil within the financial system, has put increased pressures on the European Central Bank to shore up the economy,” DailyFX analyst David Song said.
“The European Central Bank may continue to soften its hawkish tone for monetary policy, and the central bank may show an increased willingness to delay its exit strategy further as the region faces a slowing recovery,” Song said. Read more on the ECB meeting.
The Bank of England also holds its policy meeting on Thursday.
“While we think there is a risk for a quantitative easing (QE) announcement today, the Bank of England will more likely wait until November before proceeding, giving them time to downgrade their inflation forecast,” strategists at BNP Paribas said, adding that in the absence of the announcement of additional easing, the British pound will rally against the U.S. dollar.
The British pound GBPUSD -0.26% fell to $1.5950 during Asian hours Thursday, down from $1.5975 in North American trade late Wednesday
The U.S. dollar USDJPY +0.13% fell to 77.28 Japanese yen, from ¥77.36 Japanese yen late Wednesday. Japan’s current-account surplus disappointed in July, as exports shrank slightly but imports grew, government data Thursday showed. Read more on Japan’s current account surplus.
However, the dollar index DXY +0.11% , which measures the U.S. unit against a basket of six rival currencies, rose to 75.575, from 75.489 in North American trade late Wednesday.
Federal Reserve Chairman Ben Bernanke was due speak later Thursday on the outlook for the U.S. economy and the possibility of further quantitative easing, his last scheduled speech ahead of the Federal Open Market Committee meeting on Sept. 20-21. Read analysis on expectations for Bernanke’s speech.
Attention will also be fixed on U.S. President Barack Obama’s plans to spur jobs growth, in his address due to be delivered later Thursday. Read a preview of Obama’s address.
In Australia, meanwhile, jobs growth slowed August, with the unemployment rate hitting a 10-month high. Read more about Australia’s jobless rate.
The Australian dollar AUDUSD -0.62% dropped after the weaker-than-expected jobs report, to trade at $1.0593 from $1.0630 ahead of the data.
Virginia Harrison is a MarketWatch reporter based in Sydney.
