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• The dollar recovered ground on Thursday, drawing relief from positive labour market data and the White House saying Canada and Mexico, and possibly other countries, may be exempted from planned U.S. import tariffs on steel and aluminium.

The dollar index against a basket of six major currencies was effectively flat at 89.585 after pulling away from a two-week trough of 89.407 the previous day.

The U.S. currency was steady at 106.040 yen after slipping to as low as 105.450 the previous day in reaction to Cohn’s departure.

The euro was little changed at $1.2408 after retracing a bounce earlier on Wednesday to a 2-1/2-week peak of $1.2447.

While worries about U.S. tariffs may have eased somewhat, the dollar’s recovery was limited as fears of trade conflicts lingered with Trump seen sticking to a protectionist stance in the longer run.

• The European Central Bank’s rate-setting Governing Council is almost certain to leave all its monetary policy settings unchanged when it meets this Thursday but there could be a change in its language that would help the Euro.

The ECB will publish a new set of staff economic projections and the possible change in its forward guidance is the removal of a line that says it stands ready to increase its asset-purchase program in terms of size and/or duration. Any removal of this so-called APP easing bias would be seen as making a tightening of policy more likely long-term and would therefore support the Euro-Zone currency.

• That said, the ECB language on QE could either accelerate or slow down the EUR's ascent towards 1.2556 Kathy Lien from BK Asset Management says, "the ECB is widely expected to leave monetary policy unchanged and the only question is how quickly they will start talking about unwinding Quantitative Easing and raising interest rates."

The December policy statement had said a review of policy language may be warranted in early 2018. So, if the language remains unchanged, the EUR could depreciate somewhat, however, investors would then start pricing-in a change in April. So, the drop will likely be short-lived.

• EUR/USD Technical Levels

A move above 1.2446 (previous day's high) would allow a stronger rise towards 1.2538 (Jan. 25 high) and 1.2556 (Feb. 16 high). On the downside, failure to hold above 1.2385 (support on 1-hour chart) could yield a sell-off to 1.2355 (1-hour 100-MA) and 1.2328 (Mar. 6 low support on 1-hour chart).

• Morgan Stanley (MS.N)’s top executive said on Wednesday that potential tariffs on steel and aluminium that U.S. President Donald Trump is expected to sign later this week are a “bad idea.”

• Japan’s economy expanded more than initially estimated in the last quarter of 2017, thanks to an upward revision of capital expenditure and inventory data, confirming the longest run of growth in28 years.

However, despite the solid growth — the eighth consecutive quarter of expansion — analysts say the Bank of Japan is unlikely to bring forward a debate on exit from monetary stimulus given the sluggish wages that have prevented consumer spending and inflation from accelerating.

• China will respond as necessary in the event of a trade war with the United States, Foreign Minister Wang Yi said on Thursday, while warning that such a war would only harm all sides.

• Oil prices steadied on Thursday, supported by healthy demand, after falling the previous day under pressure from record U.S. crude production and rising inventories.

Brent crude futures LCOc1 were at $64.36 per barrel at 0758 GMT, up 2 cents, or 0.03 percent, from their previous close. That slight rise came after a fall of more than2 percent the previous day.

U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $61.16 a barrel, up 1 cent, or 0.02 percent. WTI also fell by more than 2 percent the previous session.

• Goldman Sachs on Wednesday re-issued its global oil demand growth forecast of million barrels per day (bpd), despite recent signs of a slight slowdown, citing a strong start to the year and a pattern of second-quarter demand acceleration.2018 1.85 Reference: Reuters, CNBC, FXStreet