FOREX-Dollar steady in subdued trade, euro dips

                                
 * Dollar index steady at 84.604 <.DXY>
                                
 * Euro faces resistance near $1.2595 and $1.2620 <EUR=>
                                
 * Trade subdued as U.S. markets closed for holiday 
                                
 * SNB's Hildebrand says watching fx moves closely
                                
 
 (Adds prices, quotes)
                                
 By Lin Noueihed
                                
 LONDON, July 5 (Reuters) - The dollar steadied on Monday
after falling on weak U.S. jobs data late last week, while the
euro edged down in subdued trade as concern over euro zone debt
receded but markets fretted about the strength of the recovery.
                                
 Traders were wary of chasing the dollar lower given a U.S.
market holiday on Monday in observance of Independence Day.
                                
 Concern about the U.S. economy mounted after Friday's jobs
data showed weak private hiring, raising fears that the global
economy could be heading for a double-dip recession and dragging
the dollar to a near two-month low against a currency basket.
                                
 "The market last week was clearly concerned about a U.S.
slowdown.. It was the first week in a long time we have seen the
dollar react like that," Chris Turner, head of foreign exchange
strategy at ING, said.
                                
 "There is a creeping fear that the strong dollar environment
will start to break. That has not happened yet and it is likely
to be steady this week."
                                
 By 1103 GMT, the euro <EUR=> eased 0.3 percent to $1.2524,
with support seen close to Friday's low of around $1.2480. Last
week, the euro gained 1.5 percent against the dollar after
hitting a four-year low around $1.1875 in June.
                                
 Options with a strike price of $1.2500 expiring on Tuesday
may also cap the downside, traders said.
                                
 The euro briefly rose about 10 pips versus the dollar to
around $1.2545 <EUR=> after the euro zone Sentix investors
sentiment index improved to -1.3 in July from -4.1 the previous
month, beating expectations for a fall to -5.0 [nBAF004155]. 
                                
 A final reading of the euro zone Services Purchasing
Managers' Index, which suggested private sector expansion may
have peaked in the second quarter, had little impact on markets
mainly looking ahead to a meeting of the European Central Bank
on Thursday.
                                
 "We are really in a holding pattern," said Daragh Maher,
deputy head of global foreign exchange research at Credit
Agricole CIB. "The highlight for the euro is the ECB meeting on
Thursday but... nothing is expected there. The sovereign space
has calmed down."
                                
 The dollar index, which tracks the performance of the
greenback versus a basket of six other major currencies, was up
0.2 percent from late U.S. trade on Friday at 84.604 <.DXY>. On
Friday, it fell to 84.132, its lowest since mid-May.
                                
 Short-term support was seen around 83.20, roughly a 38.2
percent retracement of the index's move to a high near 88.71 in
June from a low of 74.17 in November.
                                
 Friday's U.S. monthly jobs report showed the economy shed
125,000 jobs in June, while private payrolls rose less than
expected. Overall employment fell for the first time this year
as thousands of temporary census jobs ended.
                                
 The data followed a raft of weak reports that suggested U.S.
consumer spending, housing and factory activity were moderating.
[ID:nN01165161]
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 For a graphic on possible double dip
http://r.reuters.com/kuv45m
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 The dollar edged down 0.06 percent against the yen to 87.79
yen, after hitting a seven-month low of 86.96 yen set last week.
                                
 Data from the Currency Futures Trading Commission showed net
long yen positions jumped in the week to June 29. <IMM/FX>
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
                                
 For a graphic on CFTC positions
                                
 http://graphics.thomsonreuters.com/10/CFTC_CURR.html
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 One-month implied volatility hovered at 11.8/12.1 <JPY1MO=>,
down from around 13 percent last week as the dollar slid to a
7-month low of 86.96 yen.
                                
 The Swiss franc held off recent record highs against the
euro <EURCHF=> after the head of the Swiss National Bank said it
was following currency movements closely [ID:nLDE66309R]. The
euro was down 0.28 percent against the Swiss franc at 1.3313.
                                
 (Graphics by Scott Barber, additional reporting by Tamawa
Desai; editing by Nigel Stephenson)