06:15 AM EDT, 05/09/2024 (MT Newswires) -- The US dollar rose against most major counterparts in early European trade on Thursday as some prominent Asian currencies came under further pressure and traders looked ahead to a potentially dovish policy update from the Bank of England.

US dollar pairs rose widely with the Japanese yen and Korean won leading declines in the G20 grouping after some soft local economic data and rising US bond yields crimped appetite for Asian FX and other currencies more generally.

Equity markets were also softer in Asia and some parts of Europe while the Turkish lira and South African rand were the only currencies in the G20 grouping to rise against the dollar during the European morning.

The European session is a quiet one for economic data with many of the continent's larger economies out for a public holiday including Switzerland, France and Germany. This leaves market attention fixated on the Bank of England monetary policy decision at 7 am ET when investors and traders will be looking for clues about the likely timing of an initial interest rate cut.

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

GBP/USD was trading 0.07% lower at 1.2484, making sterling one of better performing G10 currencies, as market waits to hear of how soon the BoE might be likely to begin reducing its 5.25% Bank Rate. The market will look to the vote split among monetary policy committee members, the latest inflation forecasts and any overt guidance given for clues about the timing of rate cuts. Overnight Index Swap rates suggest Bank Rate is likely to fall to 5.09% by the June meeting and 4.96% by the August meeting, implying high uncertainty about whether the BoE will begin cutting in June or August.

Elsewhere in Europe, EUR/USD was quoted 0.15% lower at 1.0730 after falling from overnight highs of 1.0751 soon after China's trade surplus was reported to have increased less than expected during March owing to an acceleration of spending on imports. With no economic data due today from Europe's major economies, local market attention is fixed on scheduled speeches from ECB Governing Council members Piero Cipollone and Luis de Guindos at 8:15 am ET.

In Asia, USD/JPY was trading 0.36% higher at 155.94 after rising from overnight lows around 155.14 when average cash earnings rose by just 0.6% YonY in March. This was down sharply from 1.4% previously and below the consensus for a 1.5% increase so could have dovish implications for the Bank of Japan policy outlook. This is after the Bank of Japan said Thursday in the summary of opinions from its April meeting that any future increase in interest rates will be contingent on "an improving trend in private consumption, led by wage hikes, toward the second half of this year."

Back in North America, USD/CAD was trading 0.02% higher at 1.3730 after spending much of the European morning trading between its 50- and 100-hour moving averages at 1.3728 and 1.3732, respectively. USD/CAD's limited increase made the Canadian dollar the second-best performing currency in the G10 grouping behind only the US dollar. There is no economic data due out in Canada on Thursday where market attention will instead be focused on the 11 am ET release of the Bank of Canada's Financial System Review and associated press conference with Governor Tiff Macklem.