Investing.com - The euro pared back gains against the softer dollar on Thursday after the minutes of the European Central Bank’s October meeting said the risk that it would miss its inflation target again has increased.
EUR/USD was last at 1.0673, up just 0.13% for the day, after rising as high as 1.0717 earlier.
The minutes said current measures may not be enough to help the bank achieve its inflation target.
Most members of the Governing Council shared the view that inflation risks have increased and anticipated the timing of inflation getting back to target is likely to be pushed back again.
"The impact of external factors and heightened uncertainty raised the possibility that the ECB's measures ... might not be gaining sufficient traction ... to achieve their ultimate objective," the bank said.
The bank reiterated that it is ready to act and would reexamine its policies at its upcoming meeting on December 3.
The euro was lower against the yen, with EUR/JPY slipping 0.19% to 131.5.
The yen was boosted after the Bank of Japan kept its monetary policy unchanged on Thursday, despite data on Monday showing that Japan’s economy slid into recession in the third quarter.
The central bank maintained its pledge to increase the purchase of Japanese government bonds at an annual pace of ¥80 trillion.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.22% to 99.44, off Wednesday’s highs of 99.96, the strongest since April 14.
The dollar took a breather as investors locked in profits after a rally to seven-month highs in the previous session.
Wednesday’s minutes of the Federal Reserve’s October meeting showed that most officials believe the conditions for raising interest rates could be met by its December meeting.
The U.S. central bank kept rates on hold at its October meeting but sent a strong signal that it may hike rates next month and downplayed concerns over the impact of slowing global growth on the U.S. economy.