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SINGAPORE (Thomson Financial) - The US dollar was higher against major rivals in afternoon trade Thursday with the euro under pressure from growing expectations the European Central Bank will leave rates on hold at a policy meeting later today.

The euro was last quoted at 1.3648 dollars compared with 1.3650 in late New York trade Wednesday. The euro had earlier changed hands at 1.3643 dollars in Sydney.

The ECB is expected to leave its benchmark rate at 4.0 percent, although President Jean-Claude Trichet will likely remind the market that a tightening bias remains firmly in place. That should limit the damage to the euro, NAB Capital Markets currency strategists said.

Meanwhile, there is speculation that the Bank of England may issue a statement to accompany its rate decision today in an effort to assuage investor fears about the problems in the credit markets. The BoE is also expected to leave rates on hold.

If the bank does issue a statement, it would be first time it has done so with a rate hold decision, said Robert Howard, analyst at Thomson IFR.

"The Old Lady only normally issues a statement when it moves the base rate up or down," he

said.

The pound was last trading at 2.0212 dollars compared with 2.0195 dollars in early Sydney trade.

Earlier, the dollar fell on concerns about credit market liquidity and weak US data, with home sales figures released Wednesday falling the most since the data was first compiled in 2001.

Attention is now focused on Friday's August nonfarm payroll data, seen as one of the most timely sets of data that the Fed will use in determining whether to cut the target rate to protect the US economy from the credit market crunch.

"It appears that the fallout from the credit market crunch is not fading and will hover over the market for some time to come," said John Noonan at Thomson IFR.

Singapore 2.50 pm

US dollar

115.30 yen

1.2047 sfr

Euro

1.3648 usd

157.37 yen

1.6445 sfr

0.6749 stg

Sterling

2.0212 usd

233.04 yen

2.4364 sfr

Australian dollar

0.82.25 usd

0.4068 stg

94.82 yen

New Zealand dollar

0.6889 usd

ciara.linnane@thomson.com

bruce.hextall@thomson.com

bhx/ms/cl/ms

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