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CORRECTED - FX OUTLOOK-Dollar seen higher despite soft US payroll

(Corrects prior month ISM data in paragraph 9 to 54.4 from 53.9)

NEW YORK, Feb 1 (Reuters) - The dollar may rise next week after the greenback fought off new lows against the euro in the wake of two deep Fed rate cuts and dour economic data.

Analysts said there were signs that dollar bears were starting to throw in the towel in the face the U.S. currency’s resilience.

A light data week awaits investors, but the Institute for Supply Management’s (ISM) services report could provide more clues on the extent of the country’s economic slowdown.

“At this stage, it looks as if the downside for the dollar is going to be limited,” said David Powell, currency strategist at IDEAglobal in New York. “If this news (jobs report and the Fed’s aggressive rate cuts) was unable to force euro/dollar to retest the all-time high, what will?”

The euro briefly surged to a two-month high of $1.4952 on Friday on news that U.S. employers cut payrolls for the first time in 4-1/2 years in January, but failed to retest an all-time high of $1.4966 touched in November.

It later gave up gains to trade lower around $1.4813.

“It looks like the dollar is going to drift higher ... the most likely scenario is that we return to $1.4650 (per euro),” said Powell.

“It would seem to me that the dollar bears are throwing in the towel a bit. Since the start of the year the dollar has been the recipient of safe-haven flows, with stock markets around the world faltering,” said Powell.

The ISM services report due on Tuesday is forecast to show a reading of 53 in January, slightly down from 54.4 in December, according to a Reuters poll.

Other reports due include the weekly jobless claims, December’s pending home sales and fourth-quarter productivity.

FED SPEAKERS GALORE

Several Fed speakers take the podium next week, but analysts do not expect them to sing a different tune from Chairman Ben Bernanke who has said the central bank does not forecast a recession.

“They will take a more balanced tone and indicate they are prepared to ease further if the data requires it. You are going to see a fair amount of cheerleading coming out of the Fed speakers, they are not forecasting a recession,” said Brian Dolan, chief FX strategist at Forex.com in Bedminster, New Jersey.

Speakers include Dallas Federal Reserve President Richard Fisher who dissented in this week’s half percentage point cut in the fed funds rate target to 3 percent. Analysts reckon Fisher could shed more light on his decision.

Investors will also watch the outcome of policy meetings of the European Central Bank (ECB), the Bank of England (BoE) and the Reserve Bank of Australia (RBA).

The ECB is expected to leave interest rates unchanged and stick to its hawkish inflation rhetoric, while the BoE could cut and the RBA tighten policy to combat inflation pressures.

Given the light data calendar, the dollar could also get direction from the stock market, where volatility remains elevated despite the Fed’s rate cuts of 125 basis points this year.

Declines in the stock market tend to boost the dollar against the high-yielding currencies, but depress it against the low-yielding Japanese yen. Prior to a reassessment of risk last summer, investors borrowed heavily in yen to buy high-yielding currencies and assets.

But they reverse those positions as stock markets fall. Several companies report their results next week, including Walt Disney DIS.N and Time Warner Cable Inc TWC.N, could give an indication of consumer spending. (Editing by Dan Grebler)

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