The dollar bobbed below a one-week high against the euro on Thursday as dealers awaited comments from European Central Bank chief Jean-Claude Trichet and Friday's key U.S. jobs data.
ECB policymakers are widely expected to leave interest rates on hold following Thursday's meeting and most attention will focus on Trichet's subsequent news conference at 8:30 a.m. EST.
The ECB has been wary about inflation due to a strong credit expansion and booming housing markets in some euro zone countries, but sagging growth in the 12-country bloc is complicating the picture.
"No one is expecting a rate move today, so the focus will be on Trichet, particularly if he makes any comments about reserve diversification into euros," said Paul Mackel, foreign exchange strategist at ABN AMRO.
Expectations that Friday's data will show strong U.S. job growth last month lifted the dollar beyond $1.31 to the euro on Wednesday for the first time in over a week. The U.S. currency was a touch lower at $1.3156 per euro at 6 a.m. EST, but still up on the week.
Economists polled by expect the U.S. economy to have created 220,000 new jobs in February, compared with 146,000 the previous month. The jobless rate is seen unchanged at 5.2 percent.
"Our view is that a lot of good news is already priced into the dollar," said Mackel, who said the bank's strategy team was running a short dollar position in its portfolio.