German bond yields also fell. As the German-U.S. yield differential continues to widen, Barclays head of FX Strategy, Asia Pacific Mitul Kotecha told CNBC, the euro will fall further: "We're still looking for parity by year-end."  So far this year, the 10-year benchmark German bund has dropped 23.5 percent to 0.381 percent, while the yield on U.S. Treasury's has risen 4.0 percent to 2.119 percent.  Investors are focused on the ECB's policy meeting later in the global day, where the central bank is due to provide details on the 60 billion euro ($66.4 billion) bond buying program it announced in January.The program followed the central bank's losing battle with deflation. The annual inflation rate slipped below 1 percent in October 2013, trended lower and finally turned negative in December 2014, falling to -0.2 percent, according to ECB data.  Read MoreWeak euro boosts euro zone businesses  Focus on Thursday will be on when the central bank plans to start flooding markets with the quantitative easing money, analysts said. While buying is scheduled to start in March, the exact timing remains unclear; "[it could start] in the week following the ECB meeting," according to a Barclays research note published on Thursday.  The ECB's latest economic outlook for the euro zone will be another point of focus on Thursday as it provides its first forecasts for 2017, according to a BNP Paribas strategy note. The latest economic data suggest the euro zone is growing, if slowly – in the fourth quarter of 2014, the region's gross domestic product grew by a better-than-forecast 0.3 percent.  But the biggest focus, according to BK Asset Management Kathy Lien, will be on what Draghi says at the post-meeting press conference.  "How far the euro falls however will be determined by Mario Draghi's level of dovishness and pessimism," she said a note on Thursday.
The euro dropped sharply ahead of the ECB policy meeting, and some analysts see a rapid decline to parity against the U.S. dollar.