Furthermore, cautiousness ahead of the European Central Bank (ECB) monetary policy meeting on Thursday was discouraging traders to push the euro out of its recent ranges.

A majority of analysts polled by Reuters predicted the ECB would keep its benchmark minimum bid refi rate steady at 4.50 per cent this week. However, some said a rise in inflationary pressures increased the chances of a rate hike in coming weeks.

"The data we have seen if anything casts more doubts about how robust the economic recovery is and there is not a strong argument for a recovery story for the euro," said Mr Tony Norfield, head of global treasury research at ABN Amro Bank in London."But the euro's downside is likely to be protected by the central banks and there will probably be intervention if it dropped below $0.87."

The euro zone services activity index fell to 60.2 in September from 60.3 in August. This was below market expectations of a 60.5 reading. Meanwhile, euro zone input prices index rose to 67.8 in September, its highest level in the survey's 27-month history.

French consumer confidence fell to minus eight in September from a revised two in July.

The euro was hovering near the day's lows around $0.8740, within a 1/4 cent of Tuesday's one-week lows around $0.8725. It is down about three cents from peaks seen on September 22 when the Group of Seven nations intervened.

Figures released on Wednesday showed Britain bought 85 million euros against sterling in joint intervention, although analysts' estimates for the total intervention amounted to several billion dollars.

"All in all the data are looking fairly weak and the euro got sold off a bit but people are still wary of intervention," said a trader ta German bank in London.

"At the moment the euro has come off from levels the G7 started to intervene at, but they have achieved a degree of stability and this is key. They are probably not happy with the level but with the fact that they have managed to stabilise the euro."

Meanwhile, the dollar was steady against major currencies after the US Federal Reserve's on Tuesday, as expected, left its key interest rate unchanged at 6.5 per cent. The Fed, however, maintained a bias toward tightening, saying inflationary pressures were still a concern.

"We haven't seen a great deal of impact on the dollar. Most people were expecting no change from the Fed," said chief economic adviser of Bank of America Jeremy Hawkins in London.

"Perhaps we've see a little disappointment in the US assets from the fact that they mantained a tightening bias, but again only at the margin."

(Reuters)