On Wednesday the dollar slid lower against the other major currencies, as market sentiment improved ahead of the European Central
Bank's upcoming policy statement. The greenback still remained close to recent 12-year highs.
The U.S. dollar index, measuring the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.29% to 93.09, still close to Friday's 12-year peak of 93.56.
EUR/USD rose 0.21% to 1.1577, still trading close to Friday's 11-year lows of 1.1459.
Sentiment on euro remained fragile as Investors waited to see if the European Central Bank would embark on an outright quantitative easing program on Thursday. Uncertainty over the outcome of Greek elections, due to be held on Sunday, with anti-bailout party Syriza leading in the polls also influenced.
USD/JPY dropped 0.98% to 117.67, stepping off the previous session's one-week highs of 118.89 after the Bank of Japan held off on expanding its monetary easing scheme and instead expanded a loan scheme aimed at boosting lending.
The BOJ maintained the size of its stimulus program and reiterated its pledge to increase base money at an annual pace of ¥80 trillion through buying government bonds and risk assets.
The central bank also cut its core inflation forecast 1% from 1.7% three months ago.
Elsewhere, the pound edged lower against the dollar, with GBP/USD easing 0.08% to 1.5131, re-approaching recent 18-month lows of 1.5032.
Sterling was not influenced by a report by the U.K. Office for National Statistics showing that the rate of unemployment dipped to 5.8% in the three months to November from 6.0% in the previous three month-period and better than expectations for a reading of 5.9%.
The report also showed that the claimant count fell by 29,700 last month, compared to expectations for a decline of 25,000 people. November’s figure was revised to a drop of 29,600 people from a previously reported decline of 26,900.
Data also showed that the average earnings index rose 1.7% in the three months to November, meeting forecasts. Excluding bonuses, wages rose by 1.8% in the three months to November, below expectations for a gain of 1.9%.
Separately, the minutes of the BoE's January policy meeting showed that members voted unanimously to keep the asset puschase facility program on hold.
Members also voted unanimously to keep interest rates unchanged at a record-low 0.5%. During the five previous months, board members Martin Weale and Ian McCafferty had consistently voted to raise interest rates to 0.75%.
Meanwhile, USD/CHF dropped 1.20% to trade at 0.8647.
The commodity-connected currencies were firmer. AUD/USD gained 0.44% to 0.8205 and NZD/USD
added 0.22% to 0.7656.
Earlier Wednesday, the Westpac Banking Corporation said that Australia's consumer sentiment rose to 2.4% this month, after a 5.7% decline in December.
USD/CAD edged down 0.14% to 1.2095, pulling away from Tuesday's more than five-and-a-half year highs of 1.2117, as markets eyed the Bank of Canada's policy statement due later in the day.
Later in the day, the U.S. was to release data on building permits and housing starts.
