The euro rose in European trading on Thursday against a basket of global currencies, attempting to recover from a 13-month low against the US dollar and heading toward its first gain in four sessions, supported by buying activity from lower levels and a pause in the US dollar's advance ahead of the release of the US Personal Consumption Expenditures report.

Amid falling oil prices, inflationary pressures on policymakers at the European Central Bank are easing, reducing the likelihood of another European interest rate hike this year.

The Price

Euro exchange rate today: The euro rose more than 0.1% against the US dollar to $1.1371, from today's opening level of $1.1358, and recorded a session low of $1.1348.

The euro ended Wednesday down 0.2% against the dollar, marking its third consecutive daily loss and touching a 13-month low of $1.1325 amid heavy selling across most global currencies against the US currency.

US dollar

The US Dollar Index fell about 0.5% on Thursday, retreating from a 13-month high of 101.80 points and reflecting a pause in the US currency's rise against a basket of major and secondary currencies.

In addition to profit-taking activity, the dollar is easing ahead of the release of the US Personal Consumption Expenditures report for May, the Federal Reserve's preferred inflation gauge.

Consumer spending data, along with comments from several Federal Reserve officials, are expected to provide crucial clues about the likelihood of at least one US interest rate hike this year.

Global oil prices

Global oil prices fell around 1% on Thursday, extending losses for a fourth consecutive session and hitting four-month lows amid expectations of smoother crude flows through the Strait of Hormuz.

There is little doubt that lower global oil prices reduce concerns about accelerating inflation, supporting the case for the European Central Bank to leave monetary policy tools unchanged for an extended period this year.

European interest rates

Reports: The European Central Bank is considering pausing monetary policy normalization in July if energy prices remain at current levels.

Money markets continue to price the probability of a 25-basis-point European interest rate increase in July at around 30%.

To reassess those expectations, investors are awaiting additional eurozone data on inflation, unemployment, and wages.

Opinions and analysis

Brent Donnelly, President of Spectra Markets, said: "Further gains for the US dollar require a wider interest rate differential, but in the short term companies still need dollars, and that demand is likely to persist for several more days."

He added: "I believe this creates a positive feedback loop for the US dollar, as speculators continue adding new long positions alongside breaks of key technical levels, but that loop is likely to lose momentum and begin fading soon."