The US dollar started the day trading with a steady pace as market players await the interest rate decisions from the European Central Bank (ECB) and the Bank of England (BOE) tonight (Thursday).
At 9.30am, the US Dollar Index (DXY) was at 97.664, up 0.02% since it opened early Thursday in Asian trading.
Global financial markets remained cautious ahead of the announcement of interest rate decisions from the European Central Bank (ECB) and the Bank of England (BoE) later today, with both central banks expected to keep interest rates on hold amid economic uncertainty and still-unbalanced inflation.
Bank of America analysts expect the ECB to keep interest rates on hold, with the emphasis of its policy communication focused more on increasing uncertainty about the economic outlook.
While confidence in a rate cut in March remains weak, the ECB's monetary policy stance is seen leaning towards gradual easing, in line with slowing growth momentum and moderating price pressures.
Meanwhile, market attention is also focused on the Bank of England decision, which is also expected to keep interest rates on hold as policymakers assess the balance between the risk of continued inflation and signs of a domestic slowdown.
The statement following the meeting is expected to be a key guide to the direction of UK monetary policy in the coming months.
In the United States, Fed funds futures show an implied probability of 90.6% that the Fed will keep interest rates on hold at the next two-day meeting ending on March 18, unchanged from the previous session.
This expectation reflects an increasingly cautious market stance, with the focus on the next economic data to assess the appropriate timing for monetary policy easing.
