FOREX-Euro steady before ECB, Canadian dollar slides again

* Euro recovers after overnight battering

* Dovish statement from Draghi might hurt single currency

* Market optimistic on Friday's U.S. non-farm payrolls

* Canadian dollar hits lowest since November 2009

By Patrick Graham

LONDON, Jan 9 (Reuters) - The euro held its ground before the European

Central Bank's monthly news conference on Thursday after falling against the

dollar and British pound overnight, while the Canadian dollar deepened a slide

to hit its lowest since late 2009.

The ECB meeting on balance was seen as a risk to the single currency,

already forecast by many to fall against the dollar this year, given the chance

of a downbeat assessment of the European economy's prospects at a time when U.S.

policymakers are beginning to tighten the monetary screws.

The euro zone central bank, as expected, kept interest rates on hold on

Thursday but President Mario Draghi's news conference from 1330 GMT does have

potential to move the currency, dealers and strategists said.

"We expect a dovish conference that would be slightly negative for the

euro," said Marcus Hettinger, strategist with Credit Suisse (NYSE: CS - news) in Zurich. "Draghi

will probably have the same message as a month ago. Inflation is still quite low

and prospects for growth cloudy."

In an outlook that contrasts with the U.S. Federal Reserve, most analysts

expect Draghi at some stage to take more steps to stimulate growth. That should

add up to relatively lower interest rates and the euro hit one-month and

one-year lows against the dollar and pound respectively late on Wednesday.

There were some positive signals in Europe on Thursday. German industrial

output beat forecasts, while Portugal was the latest recovering economy on the

euro zone's periphery to meet strong demand for a bond issue by syndication.

Some 14 percent of Ireland (Other OTC: IRLD - news) 's issue earlier this week was seen as taken up by

non-euro zone investors who will have to buy euros to buy the bonds.

"There has been some good buying from the U.S., in line with what we have

seen over the last year in both Ireland and Portugal," one of the lead managers

for the Portugal syndication told Reuters.

Hedge funds have been betting against the Canadian dollar and

another key level looked to have cracked on Thursday, the currency weakening

past lows around 1.0845 from earlier this week to its weakest since November

2009.

That said, the slide was far less pronounced than in the previous session

and the Canadian dollar resisted falling to the new low several times before the

fall and quickly steadied at 1.0853 afterwards.

FED THOUGHTS

The dollar index was lower on the day at 80.425. It rose as far as

81.166 on Wednesday, a high not seen since late November, after the weekly ADP (Frankfurt: W7L.F - news)

report showed private employers added a bigger-than-expected 238,000 jobs in

December, the strongest increase in 13 months.

That lifted expectations that non-farm payrolls on Friday would be stronger

than forecast and pushed 2-year Treasury yields to a four-month high of 43 basis

points. Payrolls on Friday remains the week's main event.