LONDON (AFP) - The dollar was steady against the euro as all eyes fixed onto a crucial, upcoming US jobs report for September in the wake of the European Central Bank's expected decision to keep the cost of borrowing in the eurozone at 2.00 percent.
The single European currency stood at 1.2285 dollars in late European trading against 1.2286 late on Wednesday in New York.
The dollar traded at 111.14 yen compared with 111.26 on Wednesday.
"We're in the pre-payrolls purgatory period," said Steve Barrow, currency strategist at Bear Stearns.
Weekly US jobs data published Thursday, though encouraging, did little to impact on expectations for Friday's data despite the Labor Department's assurances that the data had not been impacted by the recent hurricanes.
Official figures showed that the number of Americans filing new jobless claims plunged last week, with the number of new claimants falling 37,000, a steeper drop than expected by many economists, to a seasonally adjusted 335,000.
The consensus of analysts polled predicts a near 150,000 improvement in September payrolls.
Evidence of strong job creation in September would help solidify US rate hike expectations, boosting the dollar in the process, analysts said.
Markets are meanwhile pricing in just one more quarter point rate hike in the United States this year. US borrowing costs currently stand at 1.75 percent.
Bear Stearns' Barrow has pencilled in a 175,000 improvement but doubts that the data will be enough to move the euro outside the trading range of 1.1900-1.2450 dollars it has been trading in most of the summer.
He said it will be particularly interesting to see if the euro breaks above that range should the payrolls come in particularly weak.
Expectations surrounding Friday's release are relatively positive following upbeat comments from a raft of US Federal Reserve officials despite some disappointing data earlier this week.
The monthly survey into layoffs by the outplacement firm Challenger, Grey and Christmas in the United States painted a grim picture, while the Institute for Supply Management's barometer for the services sector was disappointing.
Meanwhile, the ECB's decision to keep its key refi rate unchanged at 2.00 percent and the subsequent press conference of its chief Jean-Claude Trichet did little to alter perceptions that interest rates in the euro zone will remain on hold for a while longer, at least over the next few months.
The Bank of England also kept its key repo rate unchanged at 4.75 percent and analysts will be keen to see the minutes to the meeting on October 20 to see how many more, if any, rate rises are in the pipeline.
A raft of weak economic data in recent weeks has raised the prospect that interest rates are at, or near, their peak and could be on their way down next year.
The euro was changing hands at 1.2285 dollars against 1.2286 late on Wednesday in New York, 136.56 yen (136.71), 0.6897 pounds (0.6898) and 1.5452 Swiss francs (1.5536).
The dollar stood at 111.14 yen (111.26) and 1.2644 Swiss francs (1.2642).
The pound was at 1.7815 dollars (1.7801), 198.03 yen (198.05) and 2.2527 Swiss francs (2.2508).
On the London Bullion Market, the price of an ounce of gold stood at 418.10 dollars against 418.45 late on Wednesday.