LONDON -- The euro hovered just below a record high near $1.60 versus the dollar on Thursday, with sentiment supported by views the European Central Bank is unlikely to cut rates soon.

By contrast, the dollar was weighed as investors focused on slowing economic growth due to credit problems and a limping housing market with further interest rate cuts seen from the U.S. Federal Reserve.

Investors awaited a speech by ECB Governing Council member Axel Weber later in the day to see how tough he would be on price risks after record euro zone inflation cemented arguments for the central bank to hold rates at 4 percent. Analysts said it was just a matter of time before the euro breaks through the psychologically key $1.60 level, given relative strength in the euro zone economy and the view the Fed will keep cutting rates from 2.25 percent.

"There's quite a lot of momentum behind the euro," said Paul Robson, currency strategist at RBS Global Banking, adding he saw a break above $1.60 in the next week or so.

"The euro is probably one of the only safe ports in the current credit-tightening storm, and that's been giving euro a little bit of a boost."

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The euro was up 0.1 percent at $1.5965, having earlier matched a record high of $1.5977 hit on Wednesday according to Reuters data.

The market saw follow-through support from Wednesday's data showing a record 3.6 percent rise in euro zone prices in March.

WEBER EYED

Analysts said hawkish comments later in the session from Weber, who is known for his tough stance on price risks, may be the catalyst for a euro/dollar climb to $1.60.

Meanwhile, the dollar was undermined after data showed U.S. housing starts dropped by 11.9 percent last month and that March consumer prices rose a less-than-expected 0.3 percent.

This supported expectations the Fed will cut rates by at least 25 basis points to 2 percent in late April.

The Canadian dollar was little changed around C$1.0011 ahead of Canadian consumer price figures for March due at 1100 GMT.

Dollar weakness against the euro trimmed early gains in the U.S. currency against the yen. It was at 101.90 yen, pulling away from a session high of 102.17 yen.

Still, the yen was under selling pressure as gains in global stock markets prompted some investors to take on riskier positions such as the carry trade, in which the low-yielding Japanese currency is used to buy assets in higher-yielding ones.

This supported the Australian dollar, which benefits from an official interest rate of 7.25 percent, and pushed the currency up around 1.4 percent to 95.55 yen.

Despite earnings from JPMorgan Chase on Wednesday that helped soothe worries about bank losses and boost stock prices, investors awaited more clues about how much the slumping housing market and credit crunch has hurt corporate profitability.

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