On Thursday, the US dollar fell against its global counterparts after the release of US inflation data.
A report from the Labor Department on Wednesday showed that the Consumer Price Index rose 0.4% in March, beating analysts' forecasts for a 0.3% increase.
The data dampened expectations that the Federal Reserve (Fed) would begin cutting interest rates in June, Reuters reported.
CME's FedWatch data showed that markets are now pricing in an 18% probability of a Fed rate cut in June, compared with a probability of around 50% before the release of the CPI data.
"Two rate cuts in 2024 now look more likely as the Fed will want more confidence that inflation is trending steadily lower towards its target," said Nicholas Chia of Standard Chartered.
"While the Fed is not dependent on specific data, the evidence clearly suggests that there is no need to rush into cuts," he added.
All of the market's attention has now shifted to the US producer price data and the European Central Bank meeting.
The USD/JPY fell 0.03% to 153.12 on fears of intervention by Japanese authorities, after peaking at 153.24 on Wednesday.
Kyle Rodda, an analyst at Capital.com, believes that the likelihood of Japan intervening in the currency market is very high.
At the same time, Bank of Japan Governor Kazuo Ueda has previously stated that the central bank will not react directly to changes in the yen exchange rate when setting monetary policy.
The EUR/USD is holding steady at 1.0743 in anticipation of the European Central Bank meeting. Markets expect Europe's main financial regulator to leave interest rates unchanged but to signal a cut in June.
GBP/USD is up 0.28% at 1.2565 as traders now expect the Bank of England to cut rates sooner and more than the Federal Reserve this year.
AUD/USD and NZD/USD rose 0.29% and 0.07% to 0.6529 and 0.5990, respectively.
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