* Dollar steady vs euro as market awaits G20, ECB meeting
* Trading subdued as new quarter gets underway
* Euro zone unemployment 8.5 pct; Weak Tankan dents yen
* Stronger-than-expected UK PMI data lifts sterling
(Adds quote; updates prices; changes byline)
By Jessica Mortimer
LONDON, April 1 (Reuters) - The dollar was steady against
the euro on Wednesday as caution before a summit of Group of 20
leaders in London and a European Central Bank interest rate
decision on Thursday kept trading subdued.
Traders also noted thin trading volumes on the first day of
a new quarter, although falls in equity prices kept investors
wary, with European shares down 0.5 percent <>.
Investors were anxiously waiting to see whether G20 leaders
can agree on any effective coordinated measures to ward off a
prolonged global economic slump.
The U.S. currency had gained earlier in the global session
after Bloomberg reported U.S. President Barack Obama had
determined that a prepackaged bankruptcy was the best way
forward for General Motors Corp <GM.N>.
It pared those gains, however, after a senior U.S.
administration official said the report was "not accurate" and
that Obama's thinking on the crisis facing GM has not changed
since Monday. []
"There was a downside case for euro/dollar due to the U.S.
automaker concerns, but other than that there has been little of
particular interest to drive currencies," SEB currency analyst
in Stockholm Dag Muller said. "Volumes are subdued on the first
day of the month."
He added that markets will be looking ahead to the release
of U.S. ISM survey on manufacturing activity at 1400 GMT for
further direction.
At 1112 GMT, the euro was steady against the dollar at
$1.3254 <EUR=>. The dollar index, a gauge of the greenback's
performance against six major currencies, was also little
changed at 85.526 <.DXY>.
The yen was lower, however, as a record low reading in the
Bank of Japan's Tankan survey of confidence among the country's
big manufacturers sparked renewed worries about a deep recession
in the country. [].
The dollar rose 0.1 percent to 98.90 yen <JPY=>, having
earlier hit its highest level since March 5 of 99.45 yen, while
the euro also gained 0.1 percent to 131.10 yen <EURJPY=R>.
ECB, G20 EYED
Data on Wednesday showed unemployment in the euro zone
jumped more than expected in February to 8.5 percent,
underlining the speed of economic deterioration a day before the
European Central Bank holds a policy-setting meeting.
The ECB is widely expected to cut key interest rates by 50
basis points to a record low 1.0 percent, but focus is on
discussion of unconventional measures.
"The data highlights the weakness in the economy, suggests
the ECB continues to cut rates ... and further extension of
liquidity supplied to banks," said Juergen Michels, economist at
Citigroup.
Attention is focused on any developments at the G20 as
Obama, speaking on the eve of the summit, denied rifts between
the world's leading economies and urged them to seek a consensus
on joint action [].
"Clearly the G20 meeting is plastered across the headlines
and although some suggest this won't solve the current financial
problems, it's going to be the posturing and detail that stands
to influence specific currencies here," CMC Markets said in a
note.
Among other currencies, sterling gained 0.4 percent against
the dollar to $1.4388 <GBP=> after data showing the rate of
decline in Britain's manufacturing sector eased much more than
expected last month.
The CIPS/MARKIT manufacturing purchasing managers' index
improved to 39.1 in March from 34.9 in February, well above
analysts forecasts for a more modest rise to 35.0.
[].
(Reporting by Jessica Mortimer; additional reporting by
Tamawa Desai in London; editing by David Stamp)
