The dollar was firmly capped while the Chinese yuan advanced on Thursday after news that Washington was seeking a new round of trade talks with Beijing reduced safe-haven demand for the U.S. currency.
The euro and the pound held steady ahead of policy decisions by the European Central Bank and the Bank of England scheduled later in the day.
The dollar index against a basket of six major currencies was little changed at 94.795 (DXY) after declining about 0.5 percent the previous day.
The greenback fell following news that the Trump administration has invited Chinese officials to restart trade talks.
“The dollar did dip on the latest trade-related headlines, but it is hard to imagine the situation improving dramatically on this meeting alone. Currencies will continue reacting to each bit of news about the U.S.-China trade conflict,” said Yukio Ishizuki, senior currency strategist at Daiwa Securities.
China’s yuan <cny=cfxs>rose 0.3 percent to 6.8450 per dollar in onshore trade on Wednesday on the renewed hopes for U.S.-China trade discussions, pulling back from a 2-1/2-week low of 6.8800 brushed the previous day.</cny=cfxs>
