FOREX-Euro drops as uncertainty weighs before US jobs data

* ECB's Draghi comments buoy euro; but door open to easing
* EUR/USD volatility falls ahead of US jobs data

By Julie Haviv
NEW YORK, May 3 (Reuters) - The euro slid against the dollar
for a fourth day on Thursday as European Central Bank chief
Mario Draghi gave a more upbeat assessment of the region's
economy but left the door open for policy easing, keeping
investors cautious a day before key U.S. labor market data.
Trade was choppy, with the euro temporarily bouncing from a
two-week low, after Draghi said the euro zone economy was likely
to recover this year, although the outlook remained vulnerable
to downside risks. He spoke after the ECB kept rates unchanged
at 1 percent.
While the euro initially rose after Draghi's comments, the
"market reaction soon became muted because the ECB really did
not change anything, and it was pretty much status quo," said
Mark McCormick, G-10 currency strategist at Brown Brothers
Harriman in New York.
"ECB action is still possible," he said. "If the market
thought easing was off the table, the euro would be stronger
today, and as we head into a weekend that should have headline
risk. With elections in France and Greece, few people want to go
long the euro."
The euro hit session highs at $1.3180 after earlier
falling to two-week lows at $1.3097. It was last trading at
$1.3146, down 0.1 percent on the day.
"Friday's jobs data is another big reason many people are
cautious today," said McCormick.
A weaker-than-expected gain in U.S. payrolls could send the
dollar lower as it would raise expectations of a third round of
Federal Reserve bond buying, or quantitative easing. This
program is negative for the dollar as it is tantamount to
printing money.
The U.S. payrolls report is expected to show a gain of
170,000 in April, according to a Reuters poll of economists.
"Following a spate of weak U.S. indicators, many market
observers are bracing for lackluster April job growth," said Joe
Manimbo, senior market analyst at Western Union Business
Solutions in Washington.
The euro was also flat against the Japanese yen at 105.42.
.

"Lower (ECB) rates remain a distinct possibility in our
view, but those hoping for an imminent cut have been
disappointed," Credit Suisse said. "While the downside risks to
growth language leave the door ajar, crossing the threshold
remains data dependent."
In the options market, one-month at-the-money implied
volatility in euro/dollar fell to 8.60 percent from
9.05 percent previously. Volatility rose as high as 9.25 percent
on Wednesday.
Volatility, however, should remain steady ahead of the
French and Greek elections as well as Friday's U.S. non-farm
payrolls report.
In France, opinion polls showed socialist Francois Hollande
will be elected the next French president..
In Greece, surveys showed no clear winner emerging from the
elections, with the two main parties garnering barely enough
seats for a parliamentary majority.
The dollar, meanwhile, rose 0.1 percent against the yen to
80.18 yen, supported by data earlier in the day showing a
fall in weekly U.S. jobless benefit claims.