The US dollar rose slightly as markets entered the European session with investor focus now turning to the release of US producer inflation and retail sales data.
Earlier, consumer inflation data was released and the reading showed US consumer prices rose 6.0% in February from 6.4% previously.
In line with the uncertainty triggered by the US banking crisis and inflation seen as still high, investors expect the Federal Reserve (Fed) to raise rates by 25 basis points at next week's policy meeting from the previous expectation of 50 basis points.
The producer inflation and retail sales reports that will be released tonight are expected to give a clearer indication of the Fed's next policy path.
In the meantime, the euro is also the focus of investors ahead of the European Central Bank (ECB) policy meeting that will take place on Thursday.
The currency traded slightly lower in the European session but remained around a 4-week high against the US dollar.
Meanwhile, the pound traded flat even though UK employment data released earlier showed signs of a tight labor market easing.
On the other hand, the antipodean currency Aussie and New Zealand dollar recorded declines after inflation data from China failed to move the two currencies.
Thursday's Asian session will be a key focus for Aussie and New Zealand dollar investors with the release of New Zealand's gross domestic product (GDP) data and Australia's jobs report.
