1400 GMT - Dollar pares losses after U.S. productivity posts stronger than expected gains in third quarter, prompting euro pullback to 90 cent zone after overnight short squeeze to 90.50 area.
- Dealers say euro/dollar consolidating back in recent range, market eyes squarely on ECB on Thursday.
- ECB expected to cut refi rate quarter-point to 3.50 percent, some dealers see possible half point cut. New York dealers skeptical whether sharp ECB cut will boost euro, say ECB far behind the curve compared with aggressive Fed.
- Some European dealers, however, concerned Fed using up too much rate ammunition.
- U.S. Q3 productivity gains 2.7 percent, biggest rise since Q2 2000, from upwardly revised 2.2 percent in Q2. Unit labor costs gain 1.8 percent, down from revised 2.6 percent Q2 gain. U.S. business hours tumble 3.1 percent, biggest drop since Q1 1991.
- Dollar/yen sideways in tight range around 121 yen, buoyed after overnight fall to 120.70 3-week low.