FOREX-Euro dips as traders look towards ECB meeting

* Traders awaits Thursday's ECB meeting
* Euro falls as recent dollar selling pauses
* Sterling tanks on threat to EU divorce deal
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

(Adds new quote, latest prices, details)
By Tommy Wilkes
LONDON, Sept 7 (Reuters) - The euro fell on Monday as
traders that have pushed the single currency to multi-year highs
took a breather and prepared for the European Central Bank
meeting on Thursday to see if policymakers will introduce yet
more stimulus.
The dollar has tumbled to more than two-year lows against
the euro in recent weeks as investors bet U.S. interest rates
would stay low for longer just as European policymakers agreed a
significant recovery fund to boost the economy in Europe.
But the greenback has steadied in recent sessions,
especially after the euro's brief flirtation with the $1.20
level was followed by selling of the single currency.
Kit Juckes, FX strategist at Societe Generale, said that
while investors' euro long positions were not growing "they're
huge and rate/yield differentials aren't moving in a supportive
direction any more either."
He added that the "'Europe's doing better than the US' story
is tired", leaving euro-dollar range-bound for now.
U.S. jobs data on Friday also helped the dollar. The U.S.
Labour Department report showed that U.S. employment growth
slowed and permanent job losses increased as government funding
started running out. Still, the jobless rate fell to 8.4% from
10.2% in July but Juckes said the numbers showed a productivity
surge as employment growth lagged rebounding U.S. economic
growth. Attention is turning to Thursday's ECB meeting, where
investors are not expecting any major policy changes but will
listen closely for anything said about the euro after a
blistering rally that has likely unnerved some policymakers.
"Jawboning by ECB officials worried about the euro's rise
has helped calm fevered USD bearishness," Alvin Tan, an FX
Strategist at RBC Capital Markets, said.
By 1030 GMT, the euro was down 0.2% at $1.1815 EUR=EBS
while the dollar index =USD , which measures the dollar against
a basket of currencies, gained 0.2% to 93.082.
U.S. financial markets are closed for the Labour Day holiday
so trading volumes are likely to be thinner than usual.
Elsewhere, the big mover was sterling, which slid 1% after
Britain reportedly threatened to override its European Union
divorce deal. The currency weakened to as low as $1.3145
GBP=D3 while against the euro it dropped 0.8% to 89.88 pence
EURGBP=D3 .
Against the yen JPY=EBS , the dollar traded at 106.26,
unchanged on the day.
The Chinese offshore yuan CNH=EBS was little changed and
last fetched 6.8343 per dollar after customs data on Monday
indicated that the country's exports marked the strongest gain
since March 2019 while imports slumped. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Euro vs U.S. dollar https://tmsnrt.rs/2R3OS6k
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(Editing by Ed Osmond and Andrew Heavens)