The US dollar is awaiting pivotal data, so what is to be expected?

 The dollar rose early in European hours on Thursday, with policy decisions by central bank governors in Australia, Japan and Europe rocking trading.

Today, the dollar is awaiting data on jobless claims, and the GDP index on a quarterly basis in the United States.

At 2:55 AM ET (07:55 GMT), the dollar index, which measures the greenback against a basket of six other currencies, was up 0.1% at 93.835, with moves seen limited ahead of the policy setting meeting next week from before the Federal Reserve.

USDJPY was trading 0.2% lower at 113.56 after the Bank of Japan kept interest rates and asset purchase plans unchanged on Thursday. The central bank also lowered its forecast for economic growth in the current fiscal year, and lowered its inflation forecast to zero for the year ending March 2022 from 0.6%, indicating that it will lag behind other central banks in curbing its accommodative monetary policies.

The Reserve Bank of Australia also decided earlier in the day not to buy central government bonds for the stimulus program even though yields were well above its 0.1% target. This fueled market expectations that the Reserve Bank of Australia would raise the reference rate by 0.1% much sooner than its previous guidance for 2024, possibly as late as mid-2022.

While the USD/AUD traded 0.1% lower at 0.7504, still near a three-month high.

In addition, USDCAD rose 0.2% to 1.2374 after the Bank of Canada ended its bond-buying stimulus on Wednesday, indicating that it may raise interest rates in April 2022 as it seeks to address high inflation levels.

Also, EURUSD was trading flat at 1.1604, above a 15-month low of 1.1523 hit earlier this month ahead of the European Central Bank's policy setting meeting later on Thursday.

The European Central Bank is widely expected to use its December meeting to announce important decisions on emergency stimulus policies, but a strong rise in inflationary pressures has raised interest rate hike expectations.

Analysts at Nordea said, in a note: “It still looks far-fetched that the ECB will change benchmark interest rates early next year, and ECB President Christine Lagarde will likely seek to ease current market rates.”

Elsewhere, GBPUSD fell to 1.3742 the next day after UK Chancellor of the Exchequer Rishi Sunak presented his annual budget, committing to real increases in spending on the back of improved expectations for economic growth and tax revenues.