FOREX-Euro under pressure as ECB rate cuts seen

(Recasts, adds details, changes byline and dateline, previous LONDON)

By Vivianne Rodrigues

NEW YORK, Feb 8 (Reuters) - The euro remained under pressure on Friday and on track for its biggest weekly fall versus the dollar in 1-1/2 years amid growing expectations the European Central Bank will cut interest rates later this year.

The ECB kept its key interest rate at 4 percent on Thursday but President Jean-Claude Trichet dropped a threat to act preemptively against rising prices and accepted that unusually high uncertainty in markets may hurt the real economy.

Investors were reluctant to take big currency positions before a weekend meeting of Group of Seven finance officials in Tokyo. The summit may yield some comments on currencies, though foreign exchange is not expected to take center stage.

"It became clear this week that the economic slowdown has been moving East and that Europe is not insulated," said Mark Meadows at Tempus Consulting in Washington D.C. "The euro suddenly came under pressure and it may continue so for a while."

By early morning in New York, the euro was little changed at $1.4491 EUR=, down around 2.2 percent since Monday and on track for its biggest weekly fall since June 2006. The euro was down 0.15 percent at 155.50 yen EURJPY=, while the dollar edged down 0.2 percent to 107.28 yen JPY=.

Trade was relatively quiet, as many Asian players are away for the Lunar New Year break. Financial markets in Tokyo will be closed on Monday for a national holiday.

Sterling was up 0.2 percent versus the dollar GBP= and euro EURGBP=, recovering some of Thursday's losses sustained after the Bank of England cut rates by 25 basis points to 5.25 percent and signaled that it would likely stick with a path of gradual monetary easing.