RTRS: Dollar steady against euro, basket ahead of Draghi
* Dollar near 6-week high, flat vs euro
* ECB news conference in focus, euro seen under pressure
* Dollar/yen hits 100, BoJ stays on hold
* Market looks to Friday's U.S. non-farm payrolls
By Anooja Debnath
LONDON, Sept 5 (Reuters) - The dollar held near a six-week
high on Thursday ahead of data that could seal the case for a
cut in U.S. stimulus this month, trading flat against the euro
as investors awaited a European Central Bank news conference.
The dollar was supported by a rise in the two-year U.S. debt
yield, which hit a more-than two-year high of 0.5260 percent
, widening the currency's yield advantage.
The dollar index was flat at 82.203, not far from a
six-week high of 82.516 hit on Tuesday.
The European Central Bank kept rates on hold as widely
expected, but the market's main interest lies in president Mario
Draghi's press conference at 1230 GMT.
The euro was flat at $1.3205, edging away from the six-week
low of $1.3138, hit on Tuesday.
The single currency failed to gain support from a recent run
of encouraging economic data as investors expect the ECB to
stick to its line that interest rates will stay low to support
the euro zone's fragile recovery.
"We will be watching Draghi's comments closely and whether
the ECB will be able to ignore the recent positive data and
maintain its dovish stance," said Ian Stannard, head of European
FX strategy at Morgan Stanley.
"They might discuss in more detail financial conditions
globally and in Europe and this will allow them to stay dovish,
which will bring the euro under pressure."
Earlier, sterling was supported after the Bank of England
announced no changes to interest rates or its bond-buying
programme and made no further statement on policy.
The main focus, however, is on the U.S. nonfarm payrolls
report, due out on Friday.
If that data confirms a continued recovery in the job
market, it will be seen as sufficient for the Federal Reserve to
start reducing its bond-buying programme at its Sept. 17-18
meeting.
Expectations that the Fed will be the first major central
bank to hike rates have underpinned the dollar.
"After all the major central banks are done today the FX
shift would firmly return to the U.S. dollar on Friday. There is
a lot hinged on the non-farm payrolls data," said Neil Jones,
head of hedge fund FX sales at Mizuho Corporate Bank.
"If the number is around 200,000 the dollar will go higher.
Our dollar forecasts for the next few months are quite upbeat as
the Fed is going to taper this year."
The dollar tested the 100 yen level, marking a
six-week peak for the currency pair. It was last up 0.2 percent
at 99.94 yen.
Traders said the yen suffered as investors unwound their
safe-haven buying spurred by concerns over a U.S. plan to attack
Syria, while moving little after the Bank of Japan maintained
policy as expected.
"It seems like the market is tentatively concluding that any
military action may not last that long and its impact on the
world economy will be limited. The market is coming back to
business as usual," said Bart Wakabayashi, head of forex at
State Street Global Markets.