Euro rose in European trade above two-month lows against dollar on track for the first profit in three days after ECB President Christine Lagarde vowed to combat spiking inflation in the euro zone.
The dollar stalled on profit-taking ahead of important US labor data on Friday to provide clues for the health of the economy.
EUR/USD rose 0.15% to 1.0560, with a session-low at 1.0536, after losing 0.1% yesterday, marking two-month lows at 1.0525 after Fed Chair Jerome Powell's aggressive remarks and strong US labor sector data.
Lagarde
ECB President Christine Lagarde vowed to do everything required to bring balance back to prices in the euro zone during a conference held by the World Trade Organization in Geneve.
Lagarde vowed to restore prices to normality , as the ECB's main job is to bring back high inflation to normal 2% target throughout the euro zone.
She asserted the likelihood of a 0.5% rate hike by the ECB in March ,with other important steps later on to control prices.
Such sentiment was corroborated by Dutch Central Bank President, who expected multiple more 0.5% rate hikes later on.
The Dollar
The dollar index fell 0.1% on Thursday off three-month highs on track for the first loss in three sessions against a basket of major rivals.
Investors await important US data later on to gauge the pace of the Fed's policy tightening.
Recent private sector employment data showed the US economy added more jobs than expected in February, with now markets await the all-important payrolls report on Friday.
Odds for a 0.5% rate hike by the Fed in March surged from 28% to 78% following Fed Chair Jerome Powell's bullish Congressional testimony.