Euro steadies in London

The euro steadied on Friday, having slid after European Central Bank President Jean-Claude Trichet cooled expectations for a near-term hike in interest rates, while the dollar consolidated ahead of key US jobs data. Traders said whether the dollar's reprieve from a recent sell-off and the euro's retreat from a 12-week high will continue hinges on US job data for January due at 1330 GMT.
Economists polled by Reuters see the US economy adding 145,000 jobs in January, increasing for the fourth straight month, although the jobless rate is also likely to rise. "Our US economics team expects a more positive outcome, forecasting 160,000 jobs. Given such a number, we look for a continuation in yesterday's dollar relief rally, with the euro eyeing support at $1.3550," said Adam Myers, senior currency strategist at Credit Agricole.
The euro traded flat at $1.3627, after falling 1.2 percent the previous day and moving away from a 12-week peak of $1.3862 set on Wednesday. On the charts, the euro was holding around support from an Ichimoku cloud top at $1.3623. More support lies at $1.3570, this week's low, and $1.3535, which was resistance for the currency last month before a break there turned it into support. A breach of those rates would open the door for a slide below $1.35.
The dollar index was flat at 77.774, having rebounded sharply on Thursday and was off a 12-week low of 76.881 hit earlier this week. The dollar was up slightly at 81.64 yen, drawing little help from the rise in US yields. Traders cite large stops under 81.00 yen.
The Aussie dollar was up 0.3 percent at $1.0180, having jumped to a one-month high of $1.0196 after the Reserve Bank of Australia stayed upbeat on the economic outlook and played down the impact of recent floods. Traders said an option barrier at $1.0200 was helping to cap further Aussie gains. The Canadian dollar rose to a session high against the US dollar of C$0.9845 after Canada added 69,200 more jobs in January, far more than most forecasts, while the unemployment rate unexpectedly ticked up from 7.6 percent to 7.8 percent.