TOKYO, Oct 3 (Reuters) The dollar steadied above record lows on Wednesday as investors awaited key economic data later this week for more clues on the health of the U.S. economy.
The U.S. currency had rebounded from all-time troughs against the euro and a basket of major currencies as investors trimmed bets for further declines in the greenback since the start of the week.
Investors will look to the Institute for Supply Management's indicator on the service sector later in the session and the important jobs report on Friday.
Traders said the dollar's recovery is partly due to caution that policy-makers may be tiring of the dollar's sharp sell-offs, which was prompted by an aggressive Federal Reserve interest rate cut last month and expectations of more monetary easing.
A source close to the preparations for a Eurogroup meeting told Reuters that Europe will push for a stronger statement against exchange rate volatility from the Group of Seven rich nations when they meet later this month ''The market has become increasingly cautious of buying up the euro against the dollar after a number of comments from European officials on currencies,'' said Hideyuki Inoue, chief manger of forex trading at Mitsubishi UFJ Trust Bank.
The euro was little changed from late U.S. trade on Tuesday at $1.4155, having retreated from its all-time high of $1.4283 hit on electronic trading platform EBS earlier this week.
The dollar index, a gauge of the greenback's value against a basket of six major currencies, was also flat at 78.289, having rebounded from a lifetime low of 77.657 touched on Monday.
Against the yen, the dollar was flat at 115.70 yen and the euro was also steady at 163.70 yen.
The Australian dollar was up 0.2 percent at $0.8850 but showed muted reaction when the Reserve Bank of Australia held interest rates steady at 6.5 percent earlier in the session as widely expected.
A report on Tuesday showed an index of pending U.S. home sales in August fell to its lowest since records being kept in 2001, suggested the dire housing market could worsen. But despite the weak housing data, the dollar strengthened on profit taking the previous session.
Apart from economic data and positioning, market players have been taking notice of comments by European policy-makers ahead of G7 meeting. Many analysts believe European Central Bank President Jean-Claude Trichet's statements on Monday referring to the U.S.
government's strong dollar policy could set the stage for a concerted push for stronger language on currencies ahead of G7 meeting.
Reuters SBA VP0622