The policy meeting of the European Central Bank (ECB) is now the main focus of investors who expect aggressive measures from the central bank to curb inflation.
The ECB is widely expected to raise rates by 75 basis points taking its deposit rate above zero for the first time since 2012.
However, the market also did not rule out the possibility that the central bank would implement a 50 basis point hike.
During the European session, the euro traded steady at around 0.9988 against the greenback, holding on to gains after recovering from 20-year lows.
In addition, investors will also pay attention to Federal Reserve (Fed) Chairman Jerome Powell who is scheduled to participate in discussions at the Cato Institute's Annual Monetary Conference in the New York session.
Any statement on current monetary policy by Powell could prompt an aggressive move in the currency king US dollar.
The dollar index is currently trading little changed at around 109.78 against most major currencies.
Meanwhile, the pound traded weaker at around 1.1500 against the US dollar ahead of an announcement from the UK's new Prime Minister, Liz Truss about her plans to tackle high energy bills.
