* Euro steady below previous day's 2-month high vs dlr
* Fed recommits to aggressive stimulus programme
* ECB next in focus, then U.S. jobs on Friday
By Masayuki Kitano and Ian Chua
SINGAPORE/SYDNEY, May 2 The euro eased versus
the dollar on Thursday and stayed below the previous day's
two-month high, as the focus turned to whether the European
Central Bank will cut interest rates to support the euro zone's
The euro inched down 0.1 percent to $1.3174. The
single currency had hit a two-month high of $1.3243 on Wednesday
on trading platform EBS, as the dollar retreated after data
showed that U.S. companies hired the fewest employees in seven
months in April.
The euro's immediate fortunes depend on the ECB, which is
seen likely to deliver a token 25 basis-point rate cut to its
0.75 percent benchmark refinancing rate at its meeting later on
Anything less than a rate cut could see the euro stage a
rebound, traders said.
Sim Moh Siong, FX strategist for Bank of Singapore, said the
euro could prove resilient even if the ECB were to cut its main
"The ECB rate cut has been priced in, so even if they cut...
it shouldn't really impact on the euro too much," he said,
adding that the recent weakness of U.S. economic data may help
support the single currency.
"What would have a more material impact on the euro in terms
of downside risk would be a deposit rate cut, but I don't think
that is on the table," he added.
The deposit rate, currently at zero, acts as a floor for
money markets, and the ECB has made clear it has no appetite to
take it into negative territory.
The dollar stood at 81.661 against a basket of
currencies, having hit a two-month low of 81.331 on Wednesday.
The greenback had pulled away from its two-month trough
after the U.S. Federal Reserve recommitted to its aggressive
stimulus programme on Wednesday and kept its options open on
what it would do next.
That had disappointed some in the market looking for a clear
indication of bigger debt purchases, driving U.S. Treasury
yields up from four-month lows and helping the dollar trim broad
U.S. JOBS DATA
Yet with U.S. data turning soft, some analysts said the Fed
is more likely to respond by increasing its debt purchases
rather than taper off.
Analysts at Barclays Capital said the Fed's stance was
"incrementally dovish" and suggested that real yields have room
The market's focus will now turn to the closely watched U.S.
jobs data due on Friday.
In addition to the weaker-than-expected ADP National
Employment Report, two separate reports on manufacturing
released on Wednesday also showed employment slowed in April,
pointing to the risk of a soft reading from Friday's jobs data.
Against the yen, the dollar inched down 0.1 percent to about
97.36 yen, staying below a four-year high of 99.95 yen
set in April.
Elsewhere, the Australian dollar slipped 0.3 percent to
The Australian dollar showed limited reaction to a private
survey showing that China's factory-sector growth eased in April
as new export orders fell for the first time this year.
The final HSBC Purchasing Managers' Index (PMI) dropped to
50.4 in April from March's 51.6 and was largely in line with a
flash reading of 50.5.
Doubts about the strength of China's economy after a
disappointing first quarter have weighed on the Australian
dollar in recent weeks. China is Australia's single biggest