The dollar held steady against the other major currencies on Thursday, after the release of upbeat U.S. employment data and as European Central Bank President Mario Draghi warned that inflation is likely to remain low for some time
USD/JPY was down 0.85% at a two-and-a-half week low of 108.60.
Payroll processing firm ADP said non-farm private employment rose by 173,000 last month, just below expectations for an increase of 175,000.
The economy created 166,000 jobs in April, whose figure was upwardly revised from a previously reported increase of 156,000.
Separately, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending May 28 decreased by 1,000 to 267,000 from the previous week’s total of 268,000.
Analysts had expected jobless claims to rise by 2,000 to 270,000 last week.
But the yen remained supported after Japanese Prime Minister Shinzo Abe said Tuesday he was planning to delay a scheduled sales tax hike amid ongoing weakness in the economy. He also announced plans to implement a fiscal stimulus package later this year.
EUR/USD slipped 0.11% to 1.1177, after the ECB said it was maintaining its benchmark interest rate at a record-low 0.0%, in line with market expectations.
Speaking shortly after the decision, ECB President Mario Draghi said the bank revised its inflation forecast for 2016 up to 0.2% from 0.1% before, but kept its inflation forecasts for 2016 and 2017 at 1.3% and 1.6% respectively.
Draghi also warned that inflation in the euro area is likely to remain very low, or negative, for some time.
In addition, the ECB raised its growth forecast for 2016 up to 1.6% from 1.4%, but left its forecasts for the following two years unchanged.
Draghi reiterated that the ECB will continue to run its bond-purchasing program until March 2017, or until inflation moves back towards the bank’s target of close to, but just below 2%.
The ECB will start buying debt issued by companies on 8 June, as part of the stimulus program announced in March.
The dollar was lower against the pound, with GBP/USD up 0.30% at 1.4455, while USD/CHF held steady at 0.9885.
The pound’s gains were capped however, as the Markit U.K. construction purchasing managers' index fell to 51.2 from April’s reading of 52.0. Economists had expected an unchanged reading.
The Australian dollar was weaker, with AUD/USD down 0.43% at 0.7227, while NZD/USD was almost unchanged at 0.6822.
Elsewhere, USD/CAD rose 0.24% to trade at 1.3108.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was steady at 95.39, off lows of 95.15 hit earlier in the day.