Investing.com - The dollar stabilized against the other major currencies on Thursday as concerns over prospects for a global trade war eased, while the euro was little changed as markets awaited a European Central Bank meeting later in the day.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was at 89.55 by 03:31 AM ET (08:31 AM GMT), holding above Wednesday’s two-week lows of 89.36.
Concerns over trade tensions eased overnight after the White House indicated that a number of countries, including Mexico and Canada could be granted exemptions from looming import tariffs on steel and aluminum.
That soothed fears about the prospect of more protectionist U.S. trade agenda, which had been fueled by the resignation of President Donald Trump’s top economic advisor Gary Cohn.
Trump was expected to sign a presidential proclamation to establish the tariffs later in the day. Investors fear that the proposed tariffs could spark inflation and provoke retaliation from U.S. trade partners.
Markets remained cautious as they waited to see what countermeasures other countries will take in the coming days.
The dollar also received a boost after robust U.S. private sector hiring data on Wednesday pointed to ongoing strength in the labor market.
The dollar was a touch lower against the yen, with USD/JPY slipping 0.14% to 105.93, after falling as low as 105.44 the previous day.
The euro was steady, with EUR/USD trading at 1.2403, holding below Wednesday’s two-and-a-half week highs of 1.2444 ahead of the ECB decision later Thursday.
The central bank was not expected to make any changes to monetary policy but investors were awaiting any indications that it is moving closer to ending its massive stimulus program later this year.
Sterling was little changed against the dollar, with GBP/USD last at 1.3897.
The Canadian dollar was steady against the greenback, with USD/CAD at 1.2906. The pair hit a high of 1.3000 on Wednesday before recovering amid reports that Trump's tariffs may exempt Canada.