The euro took a breather in early trade on Thursday as investors prepared for the European Central Bank meeting, with many hoping any signals it will add fresh stimulus into the economy could inject some life into currencies stuck in trading ranges.

The euro/ dollar exchange rate has had a quiet start to 2019, as central banks have rowed back on monetary policy tightening plans in the face of slowing economic momentum. That has suppressed market volatility and left investors struggling to decide on the direction for currencies.

Analysts said expectations for the ECB to signal the launch of new cheap bank loans had largely been priced into the euro, and the focus will be on the bank's economic forecasts and indications for whether it will delay a rate hike that the market still expects to happen next year.

“The market has already priced in a lot. We don't expect the ECB to make any changes but signal that changes are imminent,” said Thu Lan Nguyen, a currencies analyst at Commerzbank, referring to the bank's forward guidance on interest rates.

“The risks are that the euro gives up a bit more. The risks are to the downside.”

The ECB is expected to cut growth forecasts and is likely to provide its strongest signal yet that stimulus is coming in the form of more cheap long-term bank loans to fight an economic slowdown.

The euro was unchanged at $1.1307 in early trading. It has traded between $1.157 and $1.1234 since November.

Euro’s overnight implied volatility has spiked to its highest since December 20.

The dollar, measured against a basket of currencies, stood at 96.888.

Elsewhere the Canadian and Australian dollars struggled near two-month lows after investors bet their central banks will ease monetary policy in the face of slowing economic momentum.

The Aussie hit a fresh two-month low of $0.70205 after data showed retail sales rose 0.1 per cent in January, missing expectations for a 0.3 per cent increase.

The currency was already nursing losses from the previous day when below-par fourth-quarter economic growth figures reinforced evidence of slowing domestic momentum.

The Bank of Canada (BoC) on Wednesday said there was “increased uncertainty” about the timing of future rate hikes.

The loonie fell as low as C$1.3457 after the release of the BoC's latest policy statement, its lowest against the greenback since January 4. On Thursday, it was slightly stronger.

Sterling stabilised near $1.3150 as traders awaited the next developments from the Brexit-related talks.

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