The dollar index fell back in Asian trading hours on Thursday, as Australian employment data prompted a bit of buying of riskier assets ahead of a key rate meeting in Europe. The ICE dollar index DXY, which measures the greenback against a basket of six currencies, traded at 81.216 versus 81.253 in late North American trading on Wednesday. “After a soggy start in early Asia, risk appetite got a shot in the arm after Australian employment data prompted a short squeeze," said Sue Trinh, strategist at RBC Capital Markets. Australia's unemployment rate unexpectedly dropped in August, although analysts said the data actually point to softness in the labor market. Read more on jobs data. The Australian dollar AUDUSD advanced to $1.0219 from $1.0189 in late trading the previous day. Ahead of a much-anticipated interest-rate meeting at the European Central Bank, the euro EURUSD edged up to $1.2602 from $1.2596 the previous day. Read ECB preview. The euro advanced on Wednesday amid more speculation that the central bank would consider buying distressed government bonds. Read more on Wednesday's currency action. The Bank of England will also hold an interest-rate meeting on Thursday. The British pound GBPUSD traded at $1.5901 against $1.5906 reached Wednesday. Against the Japanese currency USDJPY, the dollar bought 78.43 yen compared with ¥78.40 in late trading the previous day. “Consistent with a squeeze higher in risk proxies, the U.S. dollar and the Japanese yen underperformed," said Trinh. The WSJ dollar index BUXX, which measures the dollar against a slightly larger basket, slipped to 70.86 from 70.88 late the previous day. Marketwatch
