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TOKYO, Aug 7 (Reuters) The dollar was stuck near two-month lows on Monday as traders bet that the U.S. Federal Reserve would pause this week after boosting interest rates 17 straight times.

Data released late last week showed that U.S. nonfarm payrolls grew less than expected in July, prompting traders to tilt expectations even closer to the Fed keeping rates at 5.25 percent on Tuesday.

''The way the market's sentiment is now, I think the dollar is still susceptible to selling pressure,'' said a dealer at a major Japanese bank.

But the dollar is likely to find some support ahead of the policy meeting, traders said, as the market wanted to see what the central bank may say in its post-meeting statement about the future course of rates.

Even if the Fed keeps rates unchanged, the dollar might not fall sharply unless the central bank gives strong hints that the two-year-old credit tightening campaign has reached an end.

''Concerns about high oil prices and inflation have not been dispelled,'' a Japanese trust bank trader said.

If the Fed ''suggests that interest rates could be raised depending on the situation, it may become hard to sell dollars,'' he added.

In early Tokyo trade, the euro edged up to $1.2885 after surging as far as $1.2910 on electronic trading platform EBS on Friday, its highest since early June.

The dollar index stood at 84.55, near a two-month low of 84.39 hit on Friday.

Sterling stayed in sight of a 15-month high of $1.9130 marked on Friday, trading at $1.9075.

The dollar edged down to 114.35 yen from around 114.45 yen.

REUTERS DH RK0627