(Investing.com) – The dollar was up on Thursday morning in Asia, while the euro held onto most of its overnight gains.
The latter had posted its steepest daily jump in nearly six years after a meeting between Ukrainian and Russian foreign ministers, and investor sentiment also improved as oil prices eased.
The U.S. Dollar Index that tracks the greenback against a basket of other currencies was up 0.23% to 98.175 by 10:20 PM ET (3:20 AM GMT).
The USD/JPY pair was up 0.29% to 116.16.
The AUD/USD pair inched down 0.08% to 0.7317 and the NZD/USD pair edged down 0.18% to 0.6825.
The USD/CNY pair inched up 0.04% to 6.3202 while the GBP/USD pair edged down 0.17% to 1.3156.
The European Central Bank (ECB) will hand down its policy decision later in the day, with investors looking to how Russia’s invasion of Ukraine will impact monetary policy.
The euro was at $1.1047 after climbing 1.6% on Wednesday, the single currency’s best day since June 2016. European shares also gained on Wednesday, while bonds saw a sell-off.
The euro fell to $1.0804, a 22-month low, earlier in the week as concerns grew about the invasion's impact on the European economic recovery.
"A glance across the market, in all things eurozone especially, could leave any casual observer forgiven for assuming that the war in Ukraine might have ended overnight. Not so, sadly," NAB analysts said in a note.
The note attributed the euro's gains to some optimism ahead of a meeting between Russian foreign minister Sergey Lavrov and his Ukrainian counterpart Dmytro Kuleba.
The meeting was the first between the two since Russia invaded Ukraine on Feb. 24.
It also pointed to reports that the European Union was discussing bond issuance to finance energy and defense spending, as well as “suspicions the ECB might not fully reverse its early February 'hawkish tilt' when it meets later today, given that inflation is destined to push still higher given the latest energy price shock.”
Oil recorded its biggest fall in nearly two years, after Organization of the Petroleum Exporting Countries and allies (OPEC+) member the United Arab Emirates said it would support increasing output. This in turn gave the riskier Australian dollar a boost.
On the data front, the U.S. will release its consumer price index on Friday.
This will be of note, with the U.S. Federal Reserve preparing to hand down its policy decision in the following week.
The central bank is widely expected to hike interest rates by a quarter of a percentage point in its decision.
