The euro declined against its major counterparts in the early European session on Thursday, as investors await the European Central Bank's rate decision amid expectations for a change in its forward guidance to signal an intention to cut interest rates sooner.

The ECB is set to announce its policy decision at 7.45 am in Frankfurt, followed by a press conference from President Mario Draghi at 8.30 am ET.

Economists widely expect the key rates to remain unchanged. The main refi rate is currently at a record low zero percent and the marginal lending facility rate is at 0.25 percent.

The ECB is likely to adjust its guidance to pave way for further easing in the form of interest rate reduction and hint at the resumption of the QE program.

The deposit rate that is at a record low of minus 0.4 percent is expected to be cut by 0.1 basis points to minus 0.5 percent in September.

Economists expect the bank to announce further asset purchases after interest rate reduction in September.

Survey from Ifo Institute showed that Germany's business confidence weakened more-than-expected in July.

The business climate index fell to 95.7 in July from revised 97.5 in June. The score was forecast to fall to 97.2. The initial reading for June was 97.4.

The currency showed mixed trading against its major counterparts in the Asian session. While it fell against the greenback and the yen, it was steady against the franc and the pound.

The euro edged down to 0.8912 against the pound, from a high of 0.8929 seen at 2:45 am ET. The currency is likely to find support around the 0.88 level.

The European currency depreciated to 1.1122 against the greenback, its lowest since May 30. The euro is poised to find support around the 1.09 level.

The euro fell sharply to more than a 2-year low of 1.0962 against the Swiss franc from Wednesday's closing value of 1.0969. Next key support for the euro is possibly seen around the 1.07 region.

The euro dipped to 120.18 against the yen for the first time this year. If the euro slides further, 117.00 is possibly seen as its next support level.

Data from the Bank of Japan showed that Japan producer prices rose 0.7 percent on year in June - shy of expectations for 0.8 percent and down from the upwardly revised 0.9 percent gain in May.

On a monthly basis, producer prices eased 0.1 percent after sliding 0.2 percent in the previous month.

The euro that ended Wednesday's trading at 1.4634 against the loonie declined to a 9-day low of 1.4607. The euro is seen facing support around the 1.44 level.

On the flip side, the euro ticked up to 1.6651 against the kiwi, following a decline to 1.6605 at 9:30 pm ET. The next possible resistance for the euro is seen around the 1.70 level.

The euro held steady against the aussie, after rising to a weekly high of 1.5987 at 2:00 am ET. The pair was worth 1.5967 at Wednesday's close.

Reserve Bank of Australia Governor Philip Lowe said that the central bank is ready to ease monetary policy further if needed.

"…if demand growth is not sufficient, the Board is prepared to provide additional support by easing monetary policy further," he said in Sydney.

Looking ahead, the European Central Bank's interest rate decision is slated for release at 7:45 am ET. Economists expect the main refi rate to be kept at a record low of zero percent and the deposit rate at -0.40 percent.

The U.S. durable goods orders for June and weekly jobless claims for the week ended July 13 will be featured in the New York session.

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