LONDON, Jan 6 (AFP) - The dollar continued to rebound Thursday against other major currencies in spite of a weak set of US jobless claims numbers, with trade cautious ahead of Friday's keenly awaited US jobs report.
The single European currency fell to 1.3186 dollars compared with 1.3261 late on Wednesday in New York, the lowest level for almost a month.
The dollar climbed to 104.91 yen from 104.17 on Wednesday.
The US currency posted strong gains earlier in the day as it continued to correct the battering it received during the Christmas and New Year period when the euro hit an all-time high of 1.3668 dollars.
Tony Norfield, global head of forex research at ABN Amro, said trading was still "pretty erratic" at the moment, with market players continuing to cut back on their short dollar positions.
A disappointing set of weekly US jobless claims stemmed some of the currency's gains, however, with claims jumping 43,000 to 364,000 last week, the highest level since September and the biggest increase in nearly three years.
Focus nevertheless remained on Friday's key US non-farm payrolls report for December, which is expected to give some direction to the dollar.
The consensus forecast of Wall Street analysts was for a rise of around 175,000 jobs, though the number is notoriously difficult to predict and many were wary after the employment components of both the major US Institute for Supply Management indices came in weak.
"A stronger release would probably see the dollar rally extended as positive US cyclical factors become dominant. A softer release could see the dollar rally go into reverse," said HSBC analyst Clyde Wardle.
Elsewhere, the pound recovered slightly after falling sharply earlier in the day after a major index of British services sector activity released in the morning showed a bigger-than-expected fall.
The CIPS purchasing manager index of activity in the British services sector dropped to 54.9 in December from 56.7 in November, well below the expectations of analysts polled by AFX News, the financial news subsidiary of AFP, for a dip to just 56.2.
The euro was changing hands at 1.3186 dollars against 1.3261 late on Wednesday in New York, 138.37 yen (138.12), 0.7033 pounds (0.7042) and 1.5474 Swiss francs (1.5483).
The dollar stood at 104.91 yen (104.17) and 1.1736 Swiss francs (1.1678).
The pound was at 1.8750 dollars (1.8828), 196.73 yen (196.10) and 2.2002 Swiss francs (2.1991).
On the London Bullion Market, the price of an ounce of gold stood at 424.35 dollars against 426 dollars on Wednesday afternoon.
01/06/2005 17:58 GMT - AFP