06.11.2008 13:50

Asian session: [M]

The euro may extend its losses against the dollar on speculation the European Central Bank is in the midst of the most aggressive round of interest-rate cuts in its 10-year history.

ECB will lower its main refinancing rate by a half-percentage point to 3.25 percent today, after a similar-sized reduction less than a month ago, and signal further cuts. Britain's pound also weakened on speculation the Bank of England will reduce borrowing costs when it meets today.The ECB will announce its decision at 12:45GMT in Frankfurt and the bank's president, Jean-Claude Trichet, will hold a press conference 45 minutes later.

Gains in the dollar may be limited before economic data tomorrow. U.S. payrolls fell by 200,000 last month and the unemployment rate rose to a five-year high of 6.3 percent, according to the median forecast of economists.

The pound declined for a second day against the dollar as traders bet that U.K. policy makers will lower their benchmark interest rate by three-quarters of a percentage point to 3.75%. Fifteen of 60 economists in a Bloomberg survey say the BOE will reduce rates by that amount or more, with the rest predicting a half-point cut. The decision will be announced at 1200GMT today in London.

EUR/USD started the day at $1.2955 before posted session low around $1.2823. The pare bounced back later and currently trades around $1.2880.

GBP/USD got support at $1.5800 before gained ud to $1.5990.

USD/JPY from Y98.40, fell to the session low at Y97.55.

US data for Thursday starts at 1330GMT with the weekly jobless claims and the preliminary Q3 non-farm productivity and unit labor costs data. Jobless claims are expected to fall 4,000 to 475,000 in the November 1 week after holding steady in the previous week. Meanwhile, Non-farm productivity is expected to rise only 0.4% in the preliminary third quarter estimate as output growth likely fell in the quarter, but hours worked also declined. Unit labor costs are expected to accelerate to a 3.0% annual rate from the 0.5% drop in the second quarter.