LONDON (AFX) - The euro's rising trend resumed in early trade, although it was a touch lower than in Asian trade after the brief hiatus following the 50 basis point rate cut in the U.S. Economists see more gains in store for the single currency if the U.S. labour report later today proves to be weak. The report is scheduled for release at 1.30 pm UK time. "The trends are fairly well set now, for dollar weakness in the medium term," Ian Gunner, economist at ABN Amro said. He expects the trend to continue until there are signs that the U.S. has stopped slowing. Further confirmation that the U.S. economy is weakening at the current pace, is going to keep the dollar depressed, he added. A weak US payrolls report today and evidence of a retracement in consumer spending in next Friday's retail sales report are expect to sustain the euro's gains into next week, Micheal Lewis at Deutsche Bank noted. "We expect payrolls to rise 110,000," he said. Lewis also said that the euro reaching parity with the dollar has become increasingly credible, adding that he expects a move to parity within the next 3 months. The European Central Bank's decision to keep rates steady also kept the euro well underpinned while overnight losses on Wall Street indicates further dampening of sentiment on the dollar, dealers said. Sterling also retraced its losses against the dollar to climb back above 1.50 usd. However, it remained weak against the euro. Mosts analysts do not expect the Bank of England to echo the U.S. rate cut, although the decision may be finely balanced. Sterling's losses against the euro will make the Monetary Policy Committee "a bit more wary about cutting interest rates if sterling weakness extends further," Gunner at ABN Amro said. A weak sterling will remove the inflation dampening effect that has been around in the past few years, but it will also help the UK manufacturing sector perform better, he added. The yen continued its dismal run with comments from Japanese Finance Minister Kiichi Miyazawa, suggesting that the government is happy with the heavy yen selling, further affecting sentiment. In addition, Miyazawa also dismissed the possibility of intervention. In the short term, the yen could well reach 118 to 120 against the dollar, Gunner said.