Dollar steadies in London

The dollar was steady versus a basket of currencies on Friday as market players squared positions before the US jobs report later in the day, looking for clues on the size of an expected Federal Reserve rate cut next week.
The euro got a boost the previous day, recovering from three-week lows versus the dollar after the European Central Bank reiterated concerns about the inflation outlook and stirred expectations for higher rates next year.
ECB President Jean-Claude Trichet warned of strong upward pressure on inflation and said some central bankers had wanted a rate rise from the current 4.0 percent. But investors were reluctant to push the euro higher ahead of the US employment report at 1330 GMT, which may shed light on whether the Fed will cut rates by a quarter-point or a more aggressive half-point next Tuesday to help the economy.
Rises in equity markets kept investors in a reasonably optimistic mood, also helping the dollar gain some ground, although any such gains could be swiftly knocked on the head by weak payrolls reading.
"It seems risk appetite is increasing and that's corresponding to a rise in stock markets," said Johan Javeus, FX strategist at SEB Merchant Banking. "However I don't think negative sentiment on the housing market is going to turn around and if the (payroll data) is on the weak side it will be negative for stocks and the dollar."
By 1135 GMT, the dollar was up steady against a basket of six major currencies at 76.362, in sight of Thursday's one-month high of 76.816. It was up 0.25 percent at 111.55 yen, and was also up against the Canadian dollar, which has been hurt by a surprise Bank of Canada rate cut earlier in the week.
The euro was steady at $1.4636, but holding above the previous day's three-week low of $1.4526 set before the hawkish ECB comments. Following an upbeat reading of private-sector hiring this week, the median forecast in a Reuters poll showed economists expecting 90,000 new jobs to be added in the United States in November after the 166,000 increase in October. This was up from a forecast of 75,000 at the end of last week.
However other analysts pointed to weak readings from the job components of the Institute for Supply Management's manufacturing and service sector survey. The manufacturing employment index fell to 47.8 in November, slipping into contraction territory below the 50 mark to its lowest level in more than four years.
Forecasts for non-farm payrolls ranged widely from a loss of 5,000 jobs to a gain of 150,000. "Our 100,000 forecast is about in line with the low end of this year's range and consistent with a 25 basis points rate cut by the FOMC next week," said Tullett Prebon in a note to clients.