Here's a preview of the top 3 things to watch closely in Thursday's session.
EU inflation in the spotlight
EUR/USD could be the "one to watch" in Thursday's session, as preliminary inflation data is expected to show consumer prices remained roughly unchanged in August, following a 1.3% reading for July. Economists forecast that the consumer price index (CPI) rose at an annual rate of 1.4% in August, a notch higher than the 1.3% rise in July.
Inflation has trailed the European Central Bank's target of below, but close to, 2% over the medium term. That, however, has not deterred traders from piling into the euro on the back of rising expectations that the ECB will announce plans at its autumn meeting to taper its bond buying programme.
The euro has gained around 13% against the dollar so far this year.
A raft of US data on tap
Following better-than-expected economic growth and private sector job creation data on Wednesday, investors look ahead to the release of a trio of economic reports on Thursday, which may offer further evidence of a strengthening U.S. economy.
Economists forecast Core PCE, a key measure of inflation the Fed considers in its interest rate decisions, slowed to 1.4% year over year in July down from 1.5% in June.
Pending Home Sales is expected to rise 0.5% in August, while economists forecast a 3,000 increase to 237,000 in the number of individuals who filed for unemployment insurance for the week ended August 25.
The dollar has pared recent losses against its rivals, after slumping to a 16-month low on Wednesday.
An update on Canada's economic growth outlook
Canada's economic growth is expected to have steadied in the second quarter, after first-quarter economic growth missed expectations. Economists expect the data to show GDP grew at an annualised rate of 3.7% in the second quarter.
The GDP data is expected to be closely monitored as investors gauge the progress of Canada's economy, following the Bank of Canada's decision to raise rate in July for the first time in seven years.
Ahead of the data, USD/CAD traded at C$1.2622, up 0.89%, as the slump in oil prices continued to weigh on the oil-sensitive loonie.