06:05 AM EDT, 06/06/2024 (MT Newswires) -- US dollar exchange rates were a mixed bag in early European trade on Thursday as initial strength quickly faded ahead of the latest European Central Bank interest rate decision and weekly unemployment claims data in the US.

The US dollar softened in relation to the euro, Swiss franc and other European currencies like the Swedish krona and Norwegian krone, but was firmer in relation to the Japanese yen, British pound sterling and dollar-bloc commodity currencies.

The broader G20 basket was also a similarly mixed bag with the Mexican peso and Korean won rising notably and outperforming both baskets while the Indian rupee and Chinese renminbi both weakened.

Risky assets like stocks were firmer across much of Europe while government yields were higher but there was little encouragement of the moves from economic data after euro area retail sales came in softer than was expected for April.

Attention now turns to the 8:15 am ET release of the latest European Central Bank policy decision and the 8:45 am ET press conference, along with the US Labor Department's weekly initial jobless claims due at 8:30 am ET.

A quick summary of foreign exchange activity ahead of the European lunch hour and US open;

In Europe, EUR/USD was quoted 0.03% higher around 1.0878 after rising from session lows around 1.0871, which coincides with a Fibonacci resistance that was overcome following Monday's slump in the ISM Manufacturing PMI. The single currency edged higher even after retail sales came in softer than expected but will be sensitive to ECB forward guidance up ahead.

Elsewhere in Europe, GBP/USD was quoted 0.10% lower around 1.2781 after falling from highs of 1.2809 overnight, which was close to technical resistance provided by a downward-sloping trendline located around 1.2820. There is technical support for the currency around a prior Fibonacci resistance near 1.2767. Sterling was softer on the day but rose from session lows around 1.2775 after the S&P Global Construction PMI rose to 54.7 from 53 in May, when it had been expected to fall to 52.5.

In Asia, USD/JPY was quoted 0.05% higher around 155.98, down from the highs around 156.38 seen in early European trade but up from lows of 155.34 seen overnight in Asia. The yen was undermined by Ministry of Finance data showing outbound fixed income investment rising sharply in the week ending June 01, and by dovish remarks from the Bank of Japan's Toyoaki Nakamura, who reportedly said it's too early for the bank to taper its bond buying and that it should not use policy to prop up the yen.

Back in North America, USD/CAD was quoted 0.01% lower around 1.3688 after falling steadily from the highs around 1.3740 seen following the Bank of Canada's interest rate cut on Wednesday, though the pair edged higher from lows around 1.3666 during the Asia session before ebbing in European trade. Attention now turns to the 8:30 am ET release of trade balance data in Canada and the weekly unemployment claims report in the US.