Greenback steady as investors turn to ECB meeting; Euro broadly lower

The dollar stabilized on Thursday after several relatively positive U.S. economic indicators pushed the U.S. currency higher overnight.

But in otherwise quiet trading on what is Thanksgiving Day in the U.S., the Australian dollar fell following downbeat capital spending data.

Several U.S. economic reports released on Wednesday, which were mostly positive, supported expectations that the U.S. Federal Reserve will start increasing rates in December and elevated the U.S. currency against the euro and the yen.

The dollar was at ¥122.66, compared to ¥122.70 late Wednesday in New York, according to EBS.

The euro was at $1.0607, compared to $1.0625 late in New York.

Overnight, the currency pair traded in a broad range between 1.0568 and 1.0689 before settling at 1.0623, down 0.0020 or 0.19% on the session. The euro closed down against the dollar for the third time in four sessions and for the sixth time in the last nine trading days. The shared currency is down more than 3.5% against its U.S. rival over the last month.

The common currency also touched a seven-month low against the yen overnight, falling to 129.77 before recovering back to 130.20. The euro was last seen at 130.08 yen.

The market’s near-term focus is on the European Central Bank’s policy meeting on December 3. Analysts say that since the euro has factored in the potential of the ECB’s additional easing steps next week, the pair could rise if the ECB underwhelms market participants.

The ECB has signaled it's ready to expand its bond purchase program to combat weak inflation.

"The short positioning on the euro is a bit extended here in part because everyone expects the ECB to take some measures next week to ease monetary policy in the euro area further," said Thierry Wizman, global interest rates and currencies strategist at Macquarie Limited in New York.

On Wednesday, European stocks gained more than 1% as tensions following Turkey’s shooting down of a Russian jet fighter for violating Turkish airspace eased.

Asian shares advanced Thursday with the Shanghai Composite index slipping 0.2%. The Hang Seng climbed 0.6%, while Taiwan and South Korean shares added more than 1%.