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TOKYO, Aug 18 (Reuters) The dollar steadied on Friday after robust U.S. data helped the currency to trim losses made this week on inflation figures that reinforced expectations the Federal Reserve would keep interest rates on hold next month.

The Philadelphia Fed's index of business conditions in the U.S.

Mid-Atlantic region climbed in August to the highest level since April 2005, forcing some dealers to cover short dollar positions.

''The dollar's rebound on Thursday was a rather technical movement following the Philadelphia Fed data,'' said a trader at a Japanese bank.

Traders said the latest U.S. data did not change the dominant view in the market that the Fed may have finished with its two-year run of credit tightening, keeping investors reluctant to chase the dollar much higher.

The Fed left its funds rate unchanged at 5.25 percent last week after boosting rates at 17 straight meetings, though it left the door open for more credit tightening if price pressures persist.

Meanwhile, the rate outlook in the euro zone has kept the single European currency firm against the dollar and marking record peaks versus the yen.

The European Central Bank bumped up rates to 3 percent earlier this month and is seen tightening credit further, while the Bank of Japan is expected to leave rates at 0.25 percent for now after its first rate rise in six years last month.

The dollar fell across the board this week after reports on producer and consumer prices and housing came in weaker than expected.

In early Tokyo trade the dollar was little changed at 115.95 yen.

The euro was nearly flat at $1.2825, off a two-month high of $1.2913 hit last week.

The euro hovered around 148.75 yen after climbing to 148.89 yen on Wednesday, its highest level since the single currency was launched in 1999.

REUTERS PDS PM0656