The dollar was broadly steady against the euro on Wednesday and held near a recent two-year high against the yen ahead of US data that could cement further the US currency's interest rate advantage.
The likely continuation of the US Federal Reserve's credit-tightening campaign has supported the dollar, but the market was reluctant to push the dollar aggressively higher before the European Central Bank's policy decision on Thursday.
The ECB is widely expected to increase its key rate - the first increase in five years - to 2.25 percent from the current 2 percent, but after that the central bank was not expected to raise rates again soon, analysts say.
"I don't think we're looking at a Fed-style tightening cycle in the eurozone," Tullet Prebon G7 economist Lena Komileva said.
ECB Executive Board member Lorenzo Bini Smaghi reinforced current rate expectations in comments at a conference in Italy, adding that European growth was likely to be 0.5 percent in the fourth quarter of this year.
The Federal Reserve is expected to tighten rates by 25 basis points next month and also in January, pushing the fed funds rate up to 4.5 percent.
Eurozone data released earlier showed inflation fell to an annual rate of 2.4 percent in November and third quarter growth was confined at 0.6 percent - as expected.
"The market is unlikely to react too much to the November data given that the ECB has already strongly indicated that a rate hike is likely this week," Mitul Kotecha, head of global foreign exchange research at Calyon, said in a research note on the data.The dollar had rebounded on Tuesday as readings for US durable goods orders and new home sales in October and consumer confidence in November all came in stronger than expected, fuelling expectations of rising rates.
The yield advantage has helped the dollar soar to a 27-month high just below 120 yen and a two-year peak of $1.1640 per euro this month.
By 1229 GMT, the euro was steady on the day at $1.1773. The dollar was also flat at 119.55 yen, after climbing as high as around 119.78 in early Asian trade.
Earlier data showed German retail sales rose by a stronger than expected 1.9 percent month-on-month in October, but economists saw the rise as a bounce back from weak September levels, limiting the impact on the euro.
Analysts said the dollar could pierce key resistance against the yen at 120 later in the day if revised third-quarter growth data and a key US index of manufacturing activity in November provide further evidence of economic strength.