* Dollar slips, retreats from 1-mth high vs FX basket, euro
* Traders brace for Fed, c.bank seen keeping low rate pledge
* U.S. jobs data, non-manufacturing ISM due in NY session
(Adds quotes, updates prices; changes byline)
By Jessica Mortimer
LONDON, Nov 4 (Reuters) - The dollar fell broadly on
Wednesday as firmer equity and commodity prices buoyed demand
for the euro and perceived riskier currencies, while traders
braced for a policy decision from the Federal Reserve.
The decision at 1915 GMT is the key focus for the day, with
all eyes on whether the U.S. central bank will uphold its pledge
to keep the Fed funds rate low for "an extended period" even as
the economy shows signs of improving. []
Analysts said the dollar may face more selling pressure if
an unchanged statement gives a further lift to stocks.
"It is likely to be risk-positive if the Fed suggests rates
will stay low but acknowledges that the economy is doing better.
This would give a boost to equities and be negative for the
dollar," said Naeem Wahid, currency strategist at Lloyds Banking
Group.
Meanwhile, surveys revealing a bigger-than-expected
expansion in the euro zone and the UK services sectors
encouraged the view that the global economy is recovering.
[] []
"The improvement in the services PMI data out of the euro
zone and the UK has helped sustain the 'risk-on' sentiment,"
Wahid said.
The euro pared some gains, however, on news that Fitch
ratings agency downgraded Ireland's sovereign rating to 'AA-'
from 'AA+' with a stable outlook. []
At 1226 GMT, the euro <EUR=> was up 0.3 percent on the day
against the dollar at $1.4761 while the dollar index <.DXY> fell
0.3 percent to 76.141.
This pulled the dollar away from a one-month high of 76.817
hit on Tuesday, with risk appetite stoked by a more than 1
percent rise in European shares <> and by oil prices
<CLc1> moving above $80 per barrel.
The yen was also dented by the improvement in risk
sentiment, with the euro <EURJPY=R> up 0.9 percent at 134.10 yen
and the dollar <JPY=> gained 0.5 percent to 90.84 yen.
Among higher risk currencies, the Australian dollar rose 0.5
percent to $0.9071 <AUD=D4>, buoyed as gold prices <XAU=> hit a
record high and erasing an earlier fall on the back of an
unexpected slide in Australian September retail sales.
Sterling <GBP=D4> gained 0.6 percent to $1.6512 even as wary
investors await a UK policy decision on Thursday, which could
see the Bank of England increasing asset purchases. []
DATA, FED EYED
Before the Fed statement, traders awaited data on U.S.
private sectors jobs at 1315 GMT, considered a prelude to
crucial non-farm payrolls on Friday, and a key U.S. services
sector survey at 1500 GMT. <ECON>
Analysts said the upcoming data and events are likely to
keep currency trading nervous, particularly given that policy
decisions are also scheduled from the Bank of England and the
European Central Bank on Thursday.
Following unwinding in high-yielding currencies including
the Aussie and euro in recent days, however, most believe any
indication Fed rates will stay low may prompt investors to take
on riskier positions, which may push the dollar lower.
"The Fed is unlikely to offer any hints into the timing of
an exit strategy and eventual rate rises, which may help stocks
to rise and consequently boost euro/dollar," said Antje
Praefcke, currency strategist at Commerzbank in Frankfurt.
Still, analysts said barring a hawkish Fed and stellar U.S.
payrolls, a big rise in the euro beyond the mid-$1.48 region was
unlikely given resistance building around that level. The 21-day
moving average lay around $1.4843 while the 14-day moving
average was around $1.4857.
The euro recovered from a one-month low around $1.4623 hit
on Tuesday, after poor earnings results from European banks and
European Commission estimates of bank losses had renewed anxiety
over the sector's health.
(Additional reporting by Naomi Tajitsu in London; editing by
Chris Pizzey)
