The US dollar slipped further in early trading Thursday, trading at an 8-month low against most major currencies.
Markets are now more cautious ahead of central bank meetings next week, including the Federal Reserve (Fed) and the European Central Bank (ECB).
However, before that investors will be shown first with the release of US gross domestic product (GDP) data for the fourth quarter in the New York session today, and personal consumer expenditure (PCE) data on Friday.
The Aussie dollar continued to dominate the market by strengthening to a 5-month high against the US dollar, still supported by stronger-than-expected inflation readings in the fourth quarter.
The kiwi dollar was flat as the market is still evaluating the changes that new New Zealand Prime Minister Chris Hipkins will make after replacing Jacinda Ardern.
Looking at European currency movements, the euro traded stronger at a 9-month high against the US dollar amid expectations that the ECB will raise rates by 50 basis points at its next meeting.
Unlike the ECB, the Fed is expected to raise interest rates by 25 basis points, down from a 50 basis point increase in December.
Meanwhile, the pound also traded higher after going through a turbulent trading session as data showed UK producer prices unexpectedly fell last month.
This indirectly indicates that inflationary pressure in the country is decreasing ahead of the Bank of England (BOE) meeting next week.
In the meantime, the previous New York session saw the Bank of Canada (BOC) raise rates by 25 basis points to 4.75% and signal a pause to gauge the impact of its policy.
