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TOKYO, Aug 3 (Reuters) The dollar remained top-heavy on Thursday as investors awaited U.S. non-farm payrolls data due later in the week for clues about whether the Federal Reserve will continue raising rates or pause at its Aug. 8 meeting.

The European Central Bank's policy meeting later in the session was expected to keep major currencies in narrow ranges, traders said.

The ECB is widely expected to lift interest rates to 3.0 percent, the highest since November 2002. Traders said the euro was more likely to be sold than bought on the news unless ECB President Jean-Claude Trichet signalled more rate rises in coming months.

Investors took profits on the euro on Wednesday on worries that the ECB may offer a dovish outlook for its monetary policy.

''An ECB rate rise is already factored into the market and we are looking to see if Trichet uses 'vigilance' to suggest further monetary tightening,'' said a dealer at a Japanese trust bank.

But even if Trichet failed to offer clues of more rate increases and spurred euro selling, the benefit for the dollar was likely to be short-lived, he said.

''We have the U.S. jobs data ahead. Market expectation is that the Fed will pause from its tightening cycle soon, if not next week then at a meeting after that, so the dollar doesn't have much room to rise,'' the dealer said.

Fed fund futures were pricing in an around 40 percent chance the Fed will raise rates to 5.50 percent next week.

Non-farm payrolls due on Friday are estimated to have risen by 142,000 in July, after rising a smaller-than-expected 121,000 in June.

A strong a reading as 220,000-230,000 jobs may tilt market expectations for a rate rise next week and help boost the dollar but a reading of 160,000-170,000 would not be enough to change current expectations for a pause, said a dealer at a Japanese bank.

Traders said the dollar remained firmly supported just below 114 yen while facing resistance at around 115 yen.

The yen briefly rose on Thursday after China's official news agency Xinhua quoted the Chinese central bank as saying it would pursue greater flexibility of the yuan to help cool its economy and tame inflation. The yen often trades as a proxy for the yuan.

Traders said reaction to such news was likely to be short-lived.

The Bank of England also holds a policy meeting later in the session, and is widely expected to keep rates at 4.5 percent.

Some have said there was a slight chance of a rate increase.

The dollar was trading at 114.58 yen in early trading, a tad below 114.67 yen in late U.S. trade, but above a one-month low of around 114.20 yen hit on Wednesday.

The euro was little changed at around $1.2790 The single currency was trading at 146.60 also little changed from late U.S.

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REUTERS VJ RK0540