FOREX-Euro slips, ECB to unwind some liquidity measures

* Euro slips despite strong Greek bond sale

* ECB keeps rates steady, to unwind some liquidity measures

* Trichet still sees uneven euro zone recovery

* Dollar higher vs yen after mixed U.S. data

(Adds details, updates prices)

By Vivianne Rodrigues

NEW YORK, March 4 (Reuters) - The euro fell versus the dollar on Thursday as comments by the European Central Bank reinforced the view interest rates in the region will remain low in the foreseeable future.

The euro rose earlier after Greece's sale of 10-year bonds drew solid demand. But the currency later succumbed to selling pressure after European Central Bank President Jean-Claude Trichet stuck to his view euro zone economic recovery would be uneven and fragile.

And though the ECB took a small step toward unwinding some extraordinary support for the economy, it left much of its cash buffer for banks in place. For details, see [ID:nLDE6230PC] [ID:nLDE6231U3].

"The main take-away is that Mr. Trichet's comments so far are consistent with the view that the (European Central Bank) will keep rates at record lows perhaps longer than its U.S counterpart," said Joe Manimbo, a currency trader at Travelex Global Business Payments in Washington. "That's putting some downward pressure on the euro."

In midday trading in New York, the euro was 1 percent lower at $1.3559 <EUR=>, after trading as high as $1.3712, according to Reuters data.

Earlier the ECB said it was keeping its benchmark interest rate on hold at a record low of 1 percent for the tenth month running, as expected by economists.

The ECB said it would return next month to competitive tenders for three-month loans for banks, a sign it is more comfortable with money market conditions. It balanced the move by extending unlimited funds at flat rates until October, longer than most analysts had expected.

The comments reinforced expectations the U.S. Federal Reserve is likely to hike interest rates before the ECB -- a move that would boost the value of dollar-based assets.

Greece's highly anticipated bond sale drew strong demand, but investors were wary of whether new measures would be enough to contain its fiscal crisis. The bond sale comes a day after it unveiled plans for a further $6.5 billion in pay cuts and tax hikes to cut its deficit.

"Although easing concerns over Greece have likely caused a reduction of short euro positions over the last couple of days, market enthusiasm for buying the euro remains limited," said Vassili Serebriakov, a currency strategist at Wells Fargo Bank.

In the United States, economic data was mixed. The dollar rose versus the yen after a report showed first-time filings for unemployment benefits fell as expected last week. [ID:nLLA4EE603]

But the greenback pared some of its earlier gains after another reading showed contracts for pending sales of previously owned homes unexpectedly fell in January. [ID:nN04154147]

"Pending home sales is a negative for the U.S.," said Meg Browne, senior currency strategist at Brown Brothers Harriman in New York. "It is a sign that the housing market is losing some momentum."

The dollar was last 0.7 percent higher at 89.04 yen <JPY=>.

BOE DECISION

Comments from a deputy governor of China's central bank that Chinese inflation expectations can be controlled also prompted traders to cut long dollar/yen positions. [ID:nTOE62301C] Traders expect it to hold above the psychologically key 88.00 yen level, but direction may be determined by Friday's U.S. jobs data. <ECONUS>

Sterling turned slightly higher on the day against the dollar <GBP=>, hitting a session high of $1.5136 after the Bank of England left interest rates at 0.5 percent and held fire on its quantitative easing program. [ID:nLAC005660]

This was as expected, but analysts said there was relief among some investors that the bank did not expand QE following some recent weak UK data. (Additional reporting by Wanfeng Zhou and Nick Olivari in New York; Editing by Kenneth Barry)