Dollar recovers as investors await central banks’ policy decision

The dollar jumped on Thursday morning in Asia. Its counterparts, yen and euro, on the other hand, both declined ahead of Japan and Europe’s central bank policy decisions.

The U.S. Dollar Index that measures the greenback against other major currencies tallied an increase of 0.02% to 93.817 by 12:58 AM ET (4:58 AM GMT).

The USD/JPY pair shed 0.23% to 113.54.

The AUD/USD pair slid 0.07 % to 0.7509, while the NZD/USD pair surged 0.18% to 0.7178.

The USD/CNY pair nudged 0.10% higher to 6.3982, while the GBP/USD pair climbed 0.01% to 1.3748.

The euro plunged 0.1% to $1.1591.

Commonwealth Bank of Australia senior economist and currency strategist Kim Mundy said currencies are affected by interest rate differentials as central banks mull over their normalization cycles.

Meanwhile, the Bank of Japan released its monetary policy decision today, maintaining its key policy settings as expected by investors and analysts.

The European Central Bank (ECB) will also disclose its decision today. Investors are looking forward to the central bank’s stand on inflation and its impact on the existing ultra-easy monetary policy.