LONDON, Feb 4: The euro gained ground on the dollar here Monday as traders predicted the European Central Bank would maintain its key interest rates at current levels at a meeting on Thursday.

The single European currency in late-day trade was at 1.4827 dollars after 1.4796 dollars late Friday in New York.

The dollar rose to 106.78 yen from 106.33 on Friday.

The US currency was under pressure throughout much of the day following Friday’s weak job creation data.

Non-farm payrolls declined by 17,000 in December, falling well short of expectations for an increase of 70,000 and intensifying fears the US would fall into recession.

But the dollar was able to put up some resistance following news that US industrial orders rose 2.3 per cent in December from November, when they were up 1.7 per cent.

The December performance exceeded market expectations of a 2.0 per cent gain.

Sentiment was also affected by speculation on two key interest rate decisions later in the week.

On Thursday, the European Central Bank (ECB) and the Bank of England (BoE) reveal their latest moves, with the ECB seen on hold at 4.00 per cent and the BoE fully expected to cut by a quarter point.

While stubborn eurozone inflation is likely to induce the ECB to leave rates where they are, analysts nonetheless believe the bank will cut the cost of borrowing later in the year as growth risks increase.

“Our central forecast remains one of rates on hold for the foreseeable future, but risks are skewed to the downside and it is possible to envisage cuts occurring towards the second half of the year,” analysts at Goldman Sachs said.The Bank of England is fully expected to cut its benchmark rate by a further quarter point on Thursday to 5.25 per cent following December’s quarter-point reduction.

Also Monday central European currencies strengthened as investors bought into riskier emerging assets.

The Czech koruna hit a record level of 25.66 to the euro, reflecting a healthy local economy and expectations of tighter monetary polices from the central bank.

The Polish zloty and the Hungarian forint were also markedly stronger.

In Europe on Monday, the euro changed hands at 1.4827 dollars against 1.4796 late Friday, 158.34 yen (157.79), 0.7498 pounds (0.7530) and 1.6160 Swiss francs (1.6124).

The dollar stood at 106.78 yen (106.33) and 1.0901 Swiss francs (1.0894). The pound was at 1.9776 dollars (1.9649).—AFP