* Euro slips despite strong Greek bond sale
* ECB keeps rates steady, to unwind liquidity measures
* Trichet still sees uneven euro zone recovery
* Dollar higher vs yen after mixed U.S. data
(Adds comments, details. Updates prices)
By Vivianne Rodrigues
NEW YORK, March 4 (Reuters) - The euro fell versus thedollar on Thursday as comments by the European Central Bankreinforced the view interest rates in the region will remainlow in the foreseeable future.
The euro rose earlier in the session after Greece"s sale of10-year bonds drew solid demand. It later succumbed to sellingpressure after European Central Bank President Jean-ClaudeTrichet stuck to his view euro zone economic recovery would beuneven and fragile. And though the ECB took a small steptowards unwinding some extraordinary support for the economy itleft much of its cash buffer for banks in place. For details,see [ID:nLDE6230PC] and [ID:nLDE6231U3]
"The main takeaway is that Mr. Trichet"s comments so farare consistent with the view that the (European Central Bank)will keep rates at record lows perhaps longer than its U.Scounterpart," said Joe Manimbo, a currency trader at TravelexGlobal Business Payments in Washington. "That"s putting somedownward pressure on the euro."
In late morning trading in New York, the euro was 0.7percent lower at $1.3594 EUR=, after trading as high as$1.3712, according to Reuters data.
Earlier the ECB said it was keeping its benchmark interestrate on hold at a record low of 1 percent for the tenth monthrunning, as expected by economists.
The ECB said it would return next month to competitivetenders for three-month loans for banks, a sign it is morecomfortable with money market conditions. It balanced the moveby extending unlimited funds at flat rates unitl October,longer than most analysts had expected.
The comments reinforced expectations the U.S. FederalReserve is likely to hike interest rates before the ECB -- amove that would boost the value of dollar-based assets.
Greece"s highly anticipated bond sale drew strong demand,but investors were wary of whether new measures would be enoughto contain its fiscal crisis. The bond sale comes a day afterit unveiled plans for a further $6.5 billion in pay cuts andtax hikes to cut its deficit.
"Although easing concerns over Greece have likely caused areduction of short euro positions over the last couple of days,market enthusiasm for buying the euro remains limited," saidVassili Serebriakov, a currency strategist at Wells FargoBank.
In the United States, economic data was mixed. The dollarrose versus the yen after a report showed first-time filingsfor unemployment benefits fell as expected last week.[ID:nLLA4EE603]
But the greenback pared some of its earlier gains afteranother reading showed contracts for pending sales ofpreviously owned homes unexpectedly fell in January.[ID:nN04154147]
"Pending home sales is a negative for the U.S.," said MegBrowne, senior currency strategist at Brown Brothers Harrimanin New York. "It is a sign that the housing market is losingsome momentum."
The dollar was last 0.6 percent higher at 88.96 yen JPY=.
BOE DECISION
Comments from a deputy governor of China"s central bankthat Chinese inflation expectations can be controlled[ID:nTOE62301C] also prompted traders to cut long dollar/yenpositions. Traders expect it to hold above the psychologicallykey 88.00 yen level, but direction may be determined byFriday"s U.S. jobs data. ECONUS
Sterling turned slightly higher on the day against thedollar GBP=, hitting a session high of $1.5136 after the Bankof England left interest rates at 0.5 percent and held fire onits quantitative easing program. [ID:nLAC005660]
This was as expected, but analysts said there was reliefamong some investors that the bank did not expand QE followingsome recent weak UK data.
(Additional reporting by Wanfeng Zhou and Nick Olivari inNew York; Editing by Andrew Hay)
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