The euro nudged up against the dollar in Asia Thursday, ahead of a European Central Bank meeting, with traders looking to see if policymakers cut rates in response to weak inflation data.
The European single currency bought $1.3520 in Tokyo afternoon trade, compared with $1.3517 in New York where it got a boost from upbeat German factory data. The euro edged down to 133.33 yen from 133.40 yen in US trade on Wednesday.
The dollar bought 98.64 yen, against 98.69 yen in New York.
Analysts expect the ECB to hold rates at 0.50 percent, but figures showing eurozone inflation at a four-year low in October has raised the spectre of deflation and fuelled speculation its head Mario Draghi will leave the door open to a future cut.
"Any such hints from Draghi would see the euro weaken further," National Australia Bank said.
And Credit Agricole said: "We do not expect the ECB to deliver a rate cut today, but Draghi could hint more explicitly at a December move while providing more details about the ECB's 'liquidity plans'.
"The assessment of inflation risks holds the key." It added that "there is an expectation that the ECB will open the door to a December ease in the wake of very soft inflation data".
Dealers will also be keeping a close eye on third-quarter US gross domestic product figures later in the day and non-farm payrolls data Friday.
"The dollar is ripe for a near-term correction, as markets square positions ahead of Friday's payrolls," Credit Agricole said.
The figures will give traders a handle on the Federal Reserve's plan for its stimulus programme, with the central bank saying any pullback hinges on a firm recovery in the world's biggest economy.
The general consensus is that a strong set of numbers will push the bank into winding down the scheme sooner rather than later.
The dollar was mixed against other Asia-Pacific currencies.
It rose to Tw$29.42 from Tw$29.41, to 62.59 Indian rupees from 61.92 rupees, and to 31.29 Thai baht from 31.28 baht.
The greenback fell to Sg$1.2421 from Sg$1.2432, to 11,388 Indonesian rupiah from 11,409 rupiah, to 1,060.68 South Korean won from 1,060.90 won, and to 43.23 Philippine pesos from 43.25 pesos.
The Australian dollar fell to 94.76 US cents from 95.19 cents, while the Chinese yuan fetched 16.16 yen against 16.18 yen.
