By: Hillel Fuld
The USD and JPY were on defense on Thursday, maintaining most losses made the previous day when upbeat data helped pull investors away from safe-haven currencies and assets.

Data released on Wednesday showed the U.S. manufacturing sector increased faster than expected in August, China's factory regained momentum and Australia's economy expanded at its fastest pace in three years in the second quarter.

The released data lifted stocks, commodities and higher-yielding currencies such as the AUD.

But investors have now become hesitant about opening fresh positions ahead of the European Central Bank's policy announcement later in the day and Friday's closely-watched monthly U.S. jobs report, a trader said.

In early Asian trade, the EUR inched down 0.1 percent to $1.2796, having risen to as much as $1.2856 the previous day.

The next target for the euro is approximately $1.2873 -- a 38.2 percent Fibonacci retracement of its decline from an August peak of $1.3334 to its low of $1.2588 marked in the same month. After that, the next target its Aug. 18 high of $1.2923.

"The euro/dollar is expected to stay in the $1.2500-$1.3000 range that many players feel comfortable with," said a senior trader at a big Japanese bank.

The dollar index, a gauge of the greenback's performance against a basket of six major currencies, was steady on the day at 82.533 .DXY after falling 0.9 percent on Wednesday, marking its biggest one-day decline in nearly two months.

The dollar edged up 0.1 percent to 84.54 yen , staying above a 15-year low of 83.58 yen hit last week.

The euro was only slightly affected versus the yen at 108.17 yen after jumping 1.3 percent the previous day.

The ECB is expected to keep the benchmark refinancing rate at 1.0 percent at Thursday's meeting. It is also expected to extend lending support for banks despite raising its economic growth predictions as it seeks to balance a multi-speed recovery among the 16 countries in the euro zone.

The Australian dollar slipped 0.2 percent to $0.9087, dented by light profit-taking after it hit a three-week high of $0.9117 on the strong growth data on Wednesday