Investing.com - The euro rose to the days highs on Thursday after the minutes of the European Central Bank’s June meeting showed that officials discussed removing the easing bias from its latest monetary policy statement, before deciding against it.
EUR/USD was up 0.3% to 1.1385 by 08.00 AM ET (11.00 AM GMT).
Policymakers judged that it was important to stress the stronger momentum of the euro area recovery, while emphasizing that inflation remained subdued.
Officials were concerned that even "small and incremental" changes to forward guidance would spook markets.
“It was necessary to avoid signals that could trigger a premature tightening of financial conditions,” the minutes said.
The minutes come after ECB President Mario Draghi appeared to open the door to policy adjustments in comments last week, fueling speculation the bank could start to scale back its stimulus program as soon as September.
Draghi said factors weighing on inflation in the euro area were mainly temporary, adding that the bank could look through them.
He also said the ECB sees growth that is above trend and well distributed across the euro area, but reiterated that “a considerable degree” of stimulus is still needed in the euro zone, and that the ECB must be “prudent” in how it unwinds it.
ECB sources subsequently said the markets had over interpreted Draghi’s remarks.
Earlier Thursday, ECB Chief Economist Peter Praet said the bank needs to be patient and maintain a steady hand in policy as inflation is still far below its target.
The euro was also higher against the pound and the yen, with EUR/GBP adding 0.24% to trade at 0.8798 and EUR/JPY advancing 0.36% to 129.06.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, slid 0.2% to 95.79, pressured lower by the stronger euro.
The dollar remained on the back foot after Wednesday’s minutes of the Federal Reserve’s June policy meeting showed a lack of consensus among policymakers over the outlook for inflation and how it could impact on the future pace of interest rate increases.
The Fed hiked rates at its June meeting and stuck to its forecast for one more rate hike this year and three in 2018, but the subdued inflation outlook has since raised doubts over whether the Fed will be able to stick to its planned tightening path.
Investors were turning their attention to upcoming U.S. economic data for fresh direction.
The U.S. was to release the ADP employment report later Thursday along with the ISM non-manufacturing PMI and a report on initial jobless claims.
The U.S. non-farm payrolls report for June was due out on Friday.