Fears China could move sooner than previously expected to tighten monetary policy gave the U.S. dollar a brief boost in otherwise range-bound trade Thursday, while European traders focused on the outcome of the Swiss National Bank's quarterly monetary policy meeting.

China's February consumer-price index accelerated from the year-earlier month, to a greater-than-expected pace of 2.7%. Fixed-asset investment, bank lending and industrial-production data also beat most expectations.

The data initially weighed on higher-yielding, riskier currencies, "with the market speculating about the prospect of further Chinese tightening," said Sue Trinh, senior currency strategist at the Royal Bank of Canada.

The Japanese yen was the primary beneficiary of the move, but saw gains unwind in European activity. The dollar changed hands at 90.57 yen in recent activity, little changed from 90.55 yen in North American trade late Wednesday. The dollar had slipped to 90.20 yen after the Chinese data.

The euro, meanwhile, edged back down versus the Swiss franc as traders awaited the outcome of the SNB policy meeting. Despite rumored intervention by the SNB on Wednesday to slow the euro's slide, expectations remain that a strengthening Swiss economy will lead the central bank to set the stage for an eventual tightening of monetary policy, strategists said.

The dollar index (DXY), which measures the U.S. unit against a trade-weighted basket of six major currencies, traded at 80.342, down from 80.484 late Wednesday.

The euro fetched $1.3651, little changed from $1.3649 amid a lack of major economic data.

"The sideways trading range for [for euro/U.S. dollar] between $1.3433 and $1.3850 is still perfectly in place and we don't see a trigger to unlock this stalemate any time soon," wrote strategists at KBC Bank in Brussels. "Next week's Fed meeting might be the next milestone."

The euro, which had come under heavy pressure amid fears of a Greek debt default, has stabilized since falling to a nine-month low versus the dollar last month. Bears contend more pain is in store for the single currency amid ongoing debt woes in Greece and elsewhere in the euro zone.

"While the [European Union] may be happy with the budget deficit strategy that Greece has proposed, the economic repercussions of this public retrenchment are likely going to have a wholly negative impact on the recovery," wrote Jessica Hoversen, currency strategist at MF Global in Chicago. "The Greek government can't completely change the way Greece has been operating without expecting either social unrest or a difficult adjustment period. This goes for all the peripherals."

MF Global is targeting a fall in the euro to $1.25 by the end of the third quarter.

The British pound pushed back above the $1.50 level to change hands at $1.5038, up from $1.4964 late Wednesday.

The pound gained ground after the Bank of England's quarterly inflation expectations survey showed the public expects annual inflation of 2.5%, up from 2.4% in the previous survey.

Economists downplayed the rise, however, saying the Bank of England's Monetary Policy likely won't be swayed from its expectations consumer inflation will fall back below target in coming months after pressing above 3% in January.

"The MPC should take comfort from the fact that respondents agree with the Bank's view that the currently elevated level of inflation is not expected to last and that expectations have hardly reacted to one of the sharpest jumps in CPI inflation in recent memory," said Alan Clarke, economist at BNP Paribas.

Copyright © 2009 Dow Jones Newswires