The euro traded with a modest defensive bias ahead of the European Central Bank policy decision while the dollar advanced versus most peers amid muted flows on aggregate.

EUR/USD drops 0.1% to 1.0926 as one-week risk reversals trade at a 10 basis-point premium in favor of the topside

Analysts expect the central bank to take a timeout after June's initial quarter-point reduction, according to a Bloomberg survey.

Moves after the ECB are seen narrow with one-day volatility trading at the lowest level on decision day in more than four years.

The Bloomberg Dollar Spot Index climbs 0.1% while the Treasury 10-year yield is up by around three basis points to 4.19%.

GBP/USD down 0.2% to 1.2983 after data showed UK wages grew at the slowest pace in almost two years, in line with the median expectation of economists.

The yen weakens from the strongest level in almost six weeks as a recent steep rally in Japan's currency spurred local businesses to buy the greenback.

USD/JPY gains as much as 0.3% to 156.59 after falling 0.5% to 155.38 earlier, the lowest since June 7.

Australia's dollar outperforms its Group-of-10 peers after the nation reported a faster-than-estimated increase in jobs.

AUD/USD advances 0.2% to 0.6744 following three days of losses; employment rose more than economists estimated last month, driven by a gain in full-time positions.

Source : Bloomberg