EUR/USD is trading steadily around 1.1400 in early trading on Thursday. Markets remained cautious as traders awaited whether U.S. President Donald Trump's administration would reach a new trade deal with its partners. The European Central Bank (ECB) interest rate decision will be in focus later on Thursday.

Federal Reserve Chairman Jerome Powell said on Wednesday that trade tensions could undermine the Fed's employment and inflation goals. Powell added that U.S. economic growth appears to be slowing, with modest gains in consumer spending, a surge in imports to avoid tariffs likely weighing on estimates of gross domestic product and sentiment also deteriorating. Concerns about a slowdown in the U.S. economy could weigh on the U.S. dollar (USD) and create a tailwind for major currency pairs.

Across the Atlantic, the European Central Bank is expected to cut its key interest rate by 25 basis points (bps) on Thursday, the sixth straight rate cut amid global tariff tensions and economic uncertainty.

"We expect the ECB to fully price in a 25 basis point rate cut and communicate a dovish outlook, slightly opening the door to rates below neutral," said Ruben Segura-Cayula, an economist at Bank of America.

Traders will take further cues from the ECB press conference. Any dovish comments from policymakers could weigh on the euro in the short term. However, analysts believe that ECB President Christine Lagarde is unlikely to offer any hints about future rate cuts amid the uncertainty and the ECB may decide its next move based on the arrival of data.