The euro held firm near a three-week high versus the dollar on Thursday, as investors turned their attention to the European Central Bank's policy meeting later in the day, and as the greenback was dragged down by a drop in U.S. bond yields.
The euro has been the main focus for traders this week after Italian Prime Minister Matteo Renzi said he will resign after suffering a stinging defeat in a referendum on constitutional reform.
The dollar index, which measures the greenback against a basket of six major currencies, stood at 100.09, down from Wednesday's intraday high of 100.60.
On Wednesday, the dollar index had slipped by about 0.2 percent as U.S. bond yields slipped back.
The ECB is expected to announce a six-month extension to its quantitative easing programme on Thursday, while keeping the size of asset purchases unchanged at 80 billion euros, according to a majority of economists polled by Reuters.
"We expect the ECB to extend its asset purchases at the same pace through September 2017 while dropping the restrictions on not being able to purchase assets yielding below the depo(ist) rate and below a 2-y(ear) maturity," writes Nick Kounis, Head of Macro and Financial Markets research at ABN Amro, in a note.
According to the CME Group' s Fedwatch tool, the current implied probability of a hike from 0.50 to at least 0.75 is at 95 percent at the December meeting and 95 percent for the February meeting.
Japan's economy grew at an annualized rate of 1.3 percent in the July-September quarter, revised down from a preliminary reading of 2.2 percent annualized growth, Cabinet Office data showed on Thursday.
The revised figure compares with the median estimate for a 2.4 percent annualized growth in a Reuters poll of economists.
The figure translates into quarter-on-quarter growth of 0.3 percent, versus a preliminary reading of 0.5 percent growth and the median estimate for 0.6 percent growth.
China's foreign exchange reserves fell for a fifth straight month in November and by more than expected to the lowest since March 2011, as authorities struggled to shore up the sliding yuan currency in the face of a relentlessly rising dollar.
Reserves fell by $69.06 billion last month to $3.052 trillion, central bank data showed on Wednesday, following a drop of $45.7 billion in October.
Reference: Reuters, CNBC, Xinhua
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