Euro advance on dollar fades

The euro moved higher against the dollar Thursday after positive comments from the European Central Bank on eurozone prospects but later gave back gains as anxious investors awaited a key US employment report on Friday.

The single European currency in late-day trade was at 1.4863 dollars, down from 1.4865 late Wednesday in New York.

The dollar was meanwhile trading at 90.57 yen against 90.75 on Wednesday.

The euro in mid-afternoon had risen to 1.4876 dollars after ECB head Jean-Claude Trichet, speaking after the bank left its record low benchmark interest rate unchanged, said: "The latest information continues to signal an improvement in economic activity in the second half of this year."

But later in the trading day investors turned their attention to a keenly awaited US government report Friday on the US unemployment rate in October.

Concern that the rate might show a sharper-than-expected rise, thereby calling into question the strength of the US recovery, prompted investors to seek the safe-haven dollar at the expense of the euro, seen as a riskier bet.

Analysts at Capital Economics predict that Friday's report will show that the US economy shed 180,000 jobs in October, with the unemployment rate rising from 9.8 percent in September to 10 percent -- a level last seen in 1983.

- With payrolls still falling sharply some four months after the recession most likely ended, the United States may not just be enduring a job-less recovery but a 'job-loss' recovery - they said in a note.

Economists and the Obama administration have warned that unemployment is likely to continue to rise even as the economy emerges from the worst downturn since the Great Depression.

The high number of jobless constrains consumer spending, which traditionally drives two-thirds of US economic activity, thus dampening momentum in a fragile recovery that began in the third quarter.

Since the start of the recession in December 2007, the number of unemployed has increased by 7.6 million to 15.1 million, according to official data.

In London on Thursday, the euro was changing hands at 1.4863 dollars against 1.4865 dollars late on Wednesday, 134.61 yen (134.91), 0.8968 pounds (0.8979) and 1.5118 Swiss francs (1.5100).

The dollar stood at 90.57 yen (90.75) and 1.0172 Swiss francs (1.0157).

The pound was at 1.6571 dollars (1.6555).

On the London Bullion Market, the price of gold slipped to 1,089 dollars an ounce at the fixing from 1,090 dollars an ounce late on Wednesday.