DOLLAR DRIFTS LOWER AHEAD OF JOBS DATA

DOLLAR DRIFTS LOWER AHEAD OF JOBS DATA

The U.S. dollar declined slightly against most currencies Thursday in quiet trading.

Analysts said the dollar remained locked in a narrow range on a lack of news and a lack of trading conviction.That may change this morning if the February U.S. employment data proves bullish. Some economists forecast that non-farm jobs will show a rise of about 250,000, which could be constructive for the dollar.

But again, most traders are in a hold mode awaiting the January trade data due March 17. Speculation on the January deficit ranges from $11.5 billion to $14.5 billion. December's gap was $12.2 billion.

A sampling of analysts produced these observations:

* From James McGroarty of Discount Corp.: Wednesday's story quoting an unidentified U.S. monetary official, although somewhat confusing in its dissemination, can be considered credible. Some believe Treasury Secretary James Baker was the source. It's entirely plausible that if the coming trade data is improving, the United States would endorse a higher dollar.

* From Varick Martin of Union Bank of Switzerland: The dollar's plummet is over. That TV commercial showing you can buy two Cadillacs and hire a chauffeur for a year for the price of a Mercedes makes the point that the

dollar is good value now.

* From Joseph Volpicella of Spavo Financial: The market's deadly quiet but cross-trading is active. There were some big buyers of deutsche marks against Swiss francs, and talk that the Bank of England was either selling sterling or seeking quotes on sterling to try to keep the pound below 3.0 marks.

In London Thursday, the dollar held onto small gains through the close in thin trading, while sterling remained near the government's 3.0-mark ceiling.

The Bank of England at one point offered to sell sterling at 3.0 marks, some 20 to 30 points above the market level at the time, dealers said. Later it transpired that the bank had sold such small amounts of sterling that many traders were not aware that it had intervened.

The dollar market lacked direction ahead of today's release of the U.S. February employment data.

Sterling closed at $1.7675, unchanged on the day. Its final effective exchange rate index rose 0.1 percent to 74.8 percent.

In Tokyo Thursday, the dollar rose following overnight gains in New York, even though the rumor that sparked the rally had been denied.

A report that an unidentified U.S. monetary authority said a much stronger

dollar would be tolerated by the United States was carried in Thursday morning's edition of the Nihon Keizai Shimbun newspaper. Rumors about the story Wednesday prompted denials from the U.S. Treasury and five of the Federal Reserve Board's governors.