Meanwhile, the euro held its ground against the dollar in after noon trade today before an interest rate decision from the European Central bank. But the yen fell sharply against the dollar on suspected intervention by Japanese authorities, dealers on online trading said.

The dollar traded at 58.4350-58.4550 taka to the dollar yesterday, slightly higher from its previous closing on Wednesday, foreign exchange dealers of leading commercial banks said.

Foreign currency trading was higher today as many dealers replenish their accounts ahead of weekend holiday on Friday when pressure for dollar buying was strong from importers and traders after the outlook for the US dollar appeared increasingly rosy dealers said.

Dealers were awaiting monetary policy verdicts from the euro zone and British central banks later Thursday, though neither was expected to change policy.

There are reports that the Bank of Japan intervened aggressively in the foreign exchange market to turn speculative positions, dealers said.

Sentiment on taka, however, remained bearish thanks to huge surplus funds in the banking system, they said.

Meanwhile, the euro gained ground and stood at 1.0836 dollars today against 1.0844 late on Wednesday in New York while the dollar rose to 116.86 yen from 115.87, dealers said.

They said the fundamental case for another rate cut remains strong in the euro zone but this is unlikely to happen in the near future.

Markets were hoping for some hints on the ECB's outlook for the euro-zone economies and monetary policy at a post -meeting press conference chaired by ECB vice president Lucas Papademos, dealers said.