The U.S. dollar edged higher Thursday, while the euro slipped ahead of an ECB meeting and sterling dipped as U.K. wage growth slowed.

At 04:00 ET (09:00 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% higher to 103.550, bouncing after losses this week on increased optimism that the Federal Reserve will cut interest rates in September.

Dollar edges higher

The dollar has bounced Thursday after falling to its lowest level since March during the previous session.

Confidence that the U.S. Federal Reserve will start cutting interest rates at its next meeting in September, to boost a slowing economy, has weighed heavily on the greenback.

Economic data due later in the session are likely to show an increase in weekly initial jobless claims, while the Philadelphia Fed manufacturing index is set to indicate a slight improvement in conditions.

Sterling slips as wage growth slows

GBP/USD traded 0.2% lower at 1.2985, after the release of data showing that growth in British wages slowed in May, but remained at elevated levels.

Data showed that average weekly earnings excluding bonuses - a key gauge of inflation pressure for the BoE as it considers whether to cut interest rates next month - grew by 5.7% in a three-month period ended May, compared with a year earlier.

This represented a drop from 6.0% the previous month, and resulted in money markets raising the odds of an interest rate cut next month to 39.1% from 30%.