LONDON — The dollar steadied on Friday before monthly US employment figures and as traders digested the latest twists and turns over Greece's debt crisis and moves by China to rein in its lending.
In morning trading here, the European single currency edged up to 1.3587 dollars, up from 1.3580 dollars late in New York on Thursday.
Against the Japanese currency, the dollar firmed to 89.24 yen from 89.10 yen on Thursday.
Investors were cautious ahead of February's US non-farm payrolls which will likely show that the economy shed 65,000 jobs and the jobless rate ticked up to 9.8 percent, according to market expectations.
But analysts expect the figures may have been influenced by the heavy snow storms during that month. The data is due at 1330 GMT.
"The US labour market report today will provide some important momentum for US dollar exchange rates," said Commerzbank analyst Antje Praefcke in a note to clients.
"A positive surprise might rekindle speculation about a (US interest) rate rise as early as this year. In that case, it would be sufficiently clear that the rate of unemployment has peaked."
Meanwhile, the dollar rose against the yen as risk-averse traders eyed a key parliamentary session in China, with officials looking to rein in lending and manage a transition from massive stimulus measures.
Premier Wen Jiabao said China will slash bank lending by about a fifth in 2010 to 7.5 trillion yuan (around one trillion dollars), amid fears the economy is overheating.
Meanwhile, worries about rescue plans for debt-laden Greece heightened ahead of a meeting later in the day between Greek Prime Minister George Papandreou and German Chancellor Angela Merkel.
"If a European Union backstop bailout plan isn't forthcoming, we could see the euro-dollar further retrace its recent gains," with the euro falling back against the dollar, warned NAB Capital strategist John Kyriakopoulos.
The meeting comes after Athens on Wednesday announced austerity measures to slash its bloated public debt and successfully placed on Thursday a five-billion-euro (6.8-billion-dollar) bond issue to raise badly needed funds. But it had to offer a high interest rate of 6.37 percent.
Concerns over the Greece debt crisis had sent the euro plunging to its lowest level in more than nine months against the dollar earlier this week.
The European single currency tumbled to 1.3436 dollars on Tuesday, reaching a level last seen on May 18, 2009.
In London on Friday, the euro was changing hands at 1.3587 dollars against 1.3580 dollars on Thursday, at 121.25 yen (120.99), 0.9035 pounds (0.9031) and 1.4629 Swiss francs (1.4626).
The dollar stood at 89.24 yen (89.10) and 1.0766 Swiss francs (1.0766).
The pound was at 1.5038 dollars (1.5028).
On the London Bullion Market, the price of gold rose to 1,135.45 dollars an ounce from 1,134.45 dollars an ounce on Thursday.
