* Dollar index slips back from 11-year high
* Euro steady ahead of ECB policy meeting on Thursday
By Masayuki Kitano
TOKYO, March 4 (Reuters) – The dollar hovered below an 11-year high versus a basket of major currencies on Wednesday, as investors awaited U.S. economic data and a European Central Bank meeting later this week for fresh direction clues.
The dollar index last stood at 95.355 , having backed off slightly from Tuesday’s high of 95.570, its strongest level since September 2003.
The dollar index has gained 5.6 percent so far this year, helped by the U.S. economy’s better performance against other major world economic regions and relatively higher U.S. interest rates.
Its rise has slowed over the past month or so, however, as investors have seen fewer catalysts to move the dollar higher given the uncertainty over whether the U.S. Federal Reserve will start raising interest rates by mid-year or wait a while longer.
Later on Wednesday, the dollar could take its cues from the U.S. ISM services report, which comes ahead of the closely watched U.S. jobs data due on Friday.
The euro inched up 0.1 percent to $ 1.1181, after having slipped to a low near $ 1.1155 on Tuesday, its lowest level since late January.
The euro’s moves have been subdued over the past few sessions and it has struggled ahead of the European Central Bank’s policy meeting on Thursday and the implementation of its government bond buying programme, due to start this month.
“In interest rate markets there is a focus on the actual start of quantitative easing,” said Masafumi Yamamoto, market strategist for Praevidentia Strategy in Tokyo, referring to the ECB’s bond-buying scheme.
“The QE is weighing on the overall sentiment toward the euro,” he added.
Against the yen, the dollar eased 0.1 percent to 119.62 yen , having backed off from Tuesday’s high of 120.27 yen, which was the dollar’s highest level since Feb. 12.
(Editing by Eric Meijer)
- Banking & Budgeting