Forex:-Dollar little changed, traders await US jobs data

The dollar was little changed against the euro and the yen on Friday, as investors awaited U.S. jobs data which is expected to show that the U.S. economy is deteriorating further and may need more interest rate cuts. The euro held slight gains made the previous day, when the European Central Bank delivered its biggest interest rate cut ever, slicing 75 basis points off its key lending rate to 2.75 percent to support its economy in the face of a global recession.

Traders awaited U.S. non-farm payrolls for November, which are forecast to show a loss of 340,000 jobs. Such a reading would mark the biggest monthly drop in more than two decades.

Analysts said that speculation was growing that the figure could be even worse, and currencies were likely to take a cue from how equity markets react to the announcement at 1330 GMT. Markets are prepared for quite a big negative number," said Ian Stannard, senior foreign exchange strategist at BNP Paribas in London.

A big negative figure would add to the view that the U.S. economy is slowing down sharply, warranting a weaker dollar. But he pointed out that indications that the global recession is deepening could heighten risk aversion and possibly boost the dollar. "If we do see equity markets coming off sharply and it turns into a global equity markets sell off, then we could well see currencies coming back under pressure against the dollar, so it could actually be a dollar-positive."

At 0841 GMT, the euro was little changed at $1.2760, after inching up to a session high of $1.2795 early in the London session. Against a basket of currencies, .DXY, the U.S. currency was flat at 86.632, while hovering around 92.18 yen, roughly 0.2 percent lower on the day. The dollar and the yen have benefited from risk aversion as an increasingly grim global economic outlook has battered stock markets and other asset classes.