Euro gains on higher ECB inflation forecast

The euro advanced against the dollar and other currencies Wednesday after the ECB confirmed its easy money policies, while forecasting higher near-term inflation.

The European Central Bank kept key interest rates unchanged at their current record low levels and President Mario Draghi dismissed any talk of ending early monetary stimulus plans.

But those dovish actions were "seemingly overshadowed by the notion that, in the ECB's eyes, inflation had bottomed, and would continue to run higher in the coming months," said Christopher Vecchio, currency analyst at DailyFX.

The ECB projected area-wide inflation would reach 0.3 percent in 2015, up from its previous forecast of flat prices.

The central bank kept its 2016 inflation forecast at 1.5 percent and its 2017 forecast at 1.8 percent, the same projection as last quarter.

The dollar fell sharply against the euro, but rose a bit against the Japanese yen and the British pound.

Analysts said the dollar was weighed down by mixed US economic data ahead of Friday's critical May jobs report. The US economy is forecast to add 225,000 jobs, according to analysts.