The euro dropped against its major counterparts in the early European session on Thursday, as European shares declined after Fed minutes showed concern among policy makers about weak inflation and investors await the European Central Bank's July meeting accounts for more insights about the future of the stimulus program.

Financials were the prominent losers, after the Fed's cautious inflation outlook triggered doubts about another US interest rate hike in 2017.

The Fed minutes released overnight showed a split among policymakers about the inflation outlook, with some of them suggesting to be "patient" on raising interest rates.

The ECB will release minutes from the July 19-20 monetary policy meeting shortly, with investors craving for more details about the discussion among policy makers on the extension of the QE programme.

Final data from Eurostat showed that inflation in the currency block remained stable at 1.3 percent as initially estimated in July. The region's trade surplus increased to a 6-month high in June as the pace of decrease in imports outpaced the fall in exports. The euro showed mixed performance in the Asian session. While the euro held steady against the pound and the franc, it rose against the greenback. Against the yen, the currency weakened. The single currency weakened to 0.9094 against the pound, following an advance to 0.9136 at 2:45 am ET. The euro is likely to find support around the 0.90 area. Data from the Office for National Statistics showed that UK retail sales increased more than expected in July on food store sales.

Retail sales volume grew 0.3 percent month-on-month in July, the same rate as logged in June. Sales were expected to rise at a slower pace of 0.2 percent. After having climbed to a 2-day high of 1.1790 against the greenback at 10:00 pm ET, the euro edged down to 1.1723. Continuation of the euro's downtrend may see it challenging support around the 1.15 region. The euro slid to a 6-day low of 1.1308 against the Swiss franc, compared to 1.1364 hit late New York Wednesday. The euro is seen finding support around the 1.12 mark. The 19-nation currency that finished Wednesday's deals at 129.62 against the yen dipped to a 3-day low of 129.01. The next possible support for the euro-yen pair is seen around the 127.00 region. Data from the Ministry of Finance showed that Japan logged a merchandise trade surplus of 418.8 billion yen in July.

That topped forecasts for a surplus of 327.1 billion yen but was down from 439.8 billion yen in June. The euro dropped to a weekly low of 1.6041 versus the kiwi, more than 2-week lows of 1.4794 against the loonie and 1.4753 against the aussie, off its early highs of 1.6116, 1.4873 and 1.4865, respectively.Further weakness may see the euro challenging support around 1.59 against the kiwi, 1.47 against the loonie and 1.46 against the aussie. Looking ahead, the European Central Bank will release minutes from the July 19-20 monetary policy meeting at 7:30 am ET.

In the New York session, U.S. weekly jobless claims for the week ended August 12, industrial production and leading indicators for July as well as Canada manufacturing sales for June are set for release.

Dallas Fed President Robert Kaplan speaks at the "Dialogue with the Dallas Fed" event hosted by the Lubbock Chamber of Commerce in Texas at 1:00 pm ET.

Minneapolis Fed President Neel Kashkari speaks at an event hosted by the Edina Rotary Club in Minnesota at 1:45 pm ET.

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