The dollar steadied on Thursday after falling sharply the previous session on a Federal Reserve survey that suggested the U.S. economy may be slowing and interest rates could soon peak. The yen was mired near a record low against the euro hit in early Asian trade and has suffered from Japan's very low interest rates and much higher rates offered by other major currencies. With yield differentials still dictating currency moves, the market was keeping a close eye on upcoming U.S. data for clues on whether the Fed will raise rates for an 18th straight time to 5.5 percent at its meeting on Aug. 8. "The market is still not sure about the Fed's August rate hike," said Etsuko Yamashita, chief economist at Sumitomo Mitsui Banking Corp. The Fed's beige book of economic activity "has boosted the view of no rate hike next month but I think the dollar will likely be range-bound until the Fed meets". The European currency briefly rose as high as 148.07 yen on electronic trading platform EBS before easing to around 147.95 yen . Some speculators likely tried for knock-out option triggers around 148 yen, traders said.The euro was favoured as the European Central Bank is widely expected to keep raising rates steadily at a time when the U.S. central bank may halt its two-year-old tightening campaign. The ECB is forecast to raise rates next week to 3.0 percent from 2.75 percent. Many market players expect at least one more rate hike, and possibly more, by the end of year. Given such expectations, the euro could rise as far as 150 yen and test $1.30 in the next few months, said Mitsuru Yaguchi, senior economist at Mitsubishi UFJ Securities. "These are levels which can be backed by fundamentals for the time being," he said, adding that the effect on euro-zone growth of rate hikes since last year would become visible in 2007 and eventually weigh on the euro.