The dollar is showing signs of recovery on Thursday in anticipation of US data that could provide clues about the future course of the Federal Reserve's monetary policy.
Reports on US Retail Sales, Producer Price Index (PPI), and Jobless Claims are expected today.
The latest US Consumer Price Index (CPI) data disappointed markets and raised concerns that inflation may remain resilient, Reuters reported. This means that the Fed may keep interest rates on hold at its June meeting.
Kyle Rodda, Senior Financial Market Analyst at Capital.com, believes the weak data could cause the Fed to delay a rate cut until the first of September, which would essentially be bullish for the US dollar.
The US Dollar Index (DXY), which tracks the greenback against six world currencies, was up 0.09% at 102.88.
Against the yen, the dollar rose 0.11% to 147.90 yen as traders remain doubtful that the Bank of Japan will end negative interest rates at its March 18-19 policy meeting.
The Bank of Japan's decision to end negative interest rates is directly related to wage negotiations at large companies.
Preliminary results show that a number of large Japanese companies have agreed to fully meet labor unions' demands for wage increases.
"I think the market's focus is shifting to the next interest rate hike as well as a possible reduction in Japanese government bond purchases," said Masafumi Yamamoto of Mizuho Securities.
At the same time, he stressed that the yen will return to the level of 150 per dollar if the Bank of Japan keeps rates on hold.
The euro fell against the dollar by 0.06% to 1.0939 in anticipation of statements from some European Central Bank officials on Thursday.
The GBP/USD is showing stability and is trading at 1.2793 after it was announced that the British economy returned to growth in January.
AUD/USD is down 0.02% at 0.6619, while NZD/USD is up 0.03% at 0.6158.
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