FOREX-Dollar slips, markets brace for Fed decision

* Dollar slips, retreats from 1-mth high vs FX basket, euro

* Traders brace for Fed, c.bank seen keeping low rate pledge

* U.S. jobs data due in N.Y. session

(Adds quotes, updates prices)

By Naomi Tajitsu

LONDON, Nov 4 (Reuters) - The dollar retreated from a one-month high against a currency basket on Wednesday as traders braced for a policy decision from the Federal Reserve, which was seen keeping to its promise to keep interest rates low.

Analysts expect the U.S. central bank will uphold its pledge to keep the Fed funds rate low for "an extended period", as quoted in past statements, even as the economy shows signs of improving. Rates have been locked near zero for almost a year.

The Fed announces its decision around 1915 GMT. Currencies moved in fairly tight ranges in European trade, while analysts said the dollar may face selling pressure if an unchanged statement boosts stocks on the view that U.S. rates will stay low until at least mid-2010, as the market expects.

"The Fed is unlikely to offer any hints into the timing of an exit strategy and eventual rate rises, which may help stocks to rise and consequently boost euro/dollar," said Antje Praefcke, currency strategist at Commerzbank in Frankfurt.

By 1034 GMT, the dollar index had slipped 0.3 percent to 76.155, pulling away from 76.817 hit on Tuesday, its highest level since early October.

Before the Fed statement, traders awaited data on U.S. private sectors jobs, considered a prelude to crucial non-farm payrolls on Friday.

The ADP national employment data is forecast to show a 190,000 drop in jobs in October versus 254,000 in September. Such a reading may suggest non-farm payrolls may show the U.S. jobs picture is slowly improving after months of weakness.

U.S. services sector data is also due at 1500 GMT.

The euro EUR= rose 0.3 percent to $1.4755, brushing off an expected slide in euro zone producer prices for September and an upward revision in services PMI to its highest in 22 months.

ASSESSING RISK

The euro recovered from a one-month low around $1.4623 hit on Tuesday, after poor earnings results from European banks and European Commission estimates of bank losses had renewed anxiety over the sector's health, curbing risk appetite and prompting traders to buy the dollar and the yen.

European shares .FTEU3 recouped those losses to trade 1 percent higher on Wednesday, which helped to lift the euro.

Still, analysts say that barring a hawkish Fed and stellar U.S. payrolls, a big rise in the euro beyond the mid-$1.48 region was unlikely given resistance building around that level. The 21-day moving average lay around $1.4843 while the 14-day moving average was around $1.4857.

The dollar JPY= rose roughly 0.6 percent to 90.90 yen against a broadly weaker Japanese currency, which gave up gains made on Tuesday versus a range of currencies.

The Australian dollar AUD=D4 rose 0.6 percent to $0.9080, recovering from a fall on the back of an unexpected slide in Australian September retail sales earlier in the day.

Following an unwind in high-yielding currencies including the Aussie and euro in recent days, some analysts said any indication Fed rates will stay low may prompt investors to take on riskier positions, which may push the dollar lower. "The Fed continues to signal that a removal of stimulus is a long way off, while arguably the consensus view could nonetheless see investors re-entering risky currency trades given the degree of position cutting over the past few weeks," Barclays analysts said in a note.

The Canadian and New Zealand dollars and the Norwegian crown may be among the currencies most likely to shine if investors re-enter bullish risk trades.

The Fed meeting will be followed by policy announcements by the European Central Bank and the Bank of England on Thursday.

Few in the market expect big changes from the ECB, while speculation has been rising that the BoE may increase its asset-buying programme to keep supporting the ailing UK economy. (Editing by Chris Pizzey)