The dollar was steady against the euro after rising firmly overnight, with movements in equity markets continuing to dictate currency movements.. Equity markets in Asia fell strongly overnight on fears that the US is entering a recession and taking other major economies with it. These were fuelled by a set of weak service sector surveys out yesterday for the euro zone and US which showed activity is slowing on both sides of the Atlantic. "In this environment, US investors who in the past heavily invested abroad (more than 300 bln usd over the past 12 months alone), are likely to scale down their euro zone equity holdings," said Michael Ramon Klawitter, currency strategist at Dresdner Kleinwort. Today European bourses all opened lower, although they have since pared back some of their losses meaning the dollar failed to make much further headway this morning. Markets are now waiting for the release of fourth quarter US productivity figures, which are expected to show productivity slowed to an annual growth rate of 0.5 pct in the fourth quarter from 6.3 pct in the third quarter, although unit labour costs are expected to have edged up slightly. Unit labour costs are set to rise, echoing the expected decline in productivity, but the Fed's focus is firmly on the downside risks to growth for now, so the policy implications of higher costs are minimal.