LONDON (AFX) - The euro was rangebound in the midday trade but with its upside intact ahead of the U.S. labour report scheduled for release at 1.30 pm UK time. The dollar weakness story has become entrenched and the day's labour market data could further reinforce the view that the U.S. is indeed heading for a hard landing despite the FOMC's best efforts, dealers said. In any case, the Fed's aggressive rate cuts is only likely to bear fruit some time ahead, they said. "The trends are fairly well set now, for dollar weakness in the medium term," Ian Gunner, economist at ABN Amro said. The concerns over the outlook for the U.S. economy is only likely to solidify after the non farm payroll numbers are out, Steve Pearson, economist at Halifax added. The euro was also underpinned by the European Central Bank's decision to keep rates steady yesterday while overnight losses on Wall Street further dampened sentiment on the dollar, dealers said. Sterling was more volatile, first gaining on the dollar in tandem with the euro's resumed climb but later falling back on expectations that the Bank of England may next week move to cut interest rates. Opinion is divided because domestic economic data has been relatively robust, Pearson said. Sterling's appreciation against the dollar has been based on narrowing interest rate differentials, a cut in UK rates now will mean a move in the opposite direction, he added. The yen continued its poor run with concerns that overseas Japanese companies will be reluctant to repatriate profits adding to its woes. It had already been weakened by comments from Finance Minister Kiichi Miyazawa who dismissed the possibility of intervention. He instead suggested that the government remains comfortable with the sell off on the yen