By Gertrude Chavez-Dreyfuss and Sujata Rao

NEW YORK/LONDON (Reuters) -The euro was little changed to slightly higher against the dollar on Thursday in choppy trading, after the European Central Bank met expectations by pledging to keep interest rates at record lows for even longer, and following weaker-than-expected U.S. jobless claims data.

The ECB’s dovish pivot – which follows its recently released strategy review – at a time when many peers are mulling exiting pandemic-era stimulus is expected to keep the single European currency under pressure.

“U.S. jobless claims didn’t really help the dollar, but looking at the euro, it was really hard for the ECB to outdove market expectations,” said Vassili Serebriakov, FX strategist at UBS in New York. “The market is not pricing a 10-basis-point hike until 2024 anyway.”

ECB President Christine Lagarde didn’t really say anything to change the market’s cautious outlook on the euro zone. She said a fresh wave of the coronavirus pandemic could pose a risk to the region’s economic recovery.

In mid-morning trading, the euro was slightly higher against the dollar at $1.1792. On Wednesday, it hit a 3-1/2-month low of $1.1752.

The dollar index, meanwhile, slid 0.1% to 92.742, weighed down by softer-than-expected U.S. jobless claims data.

Data showed initial claims for state unemployment benefits increased 51,000 to a seasonally-adjusted 419,000 for the week ended July 17, the highest level since mid-May. Economists polled by Reuters had forecast 350,000 applications for the latest week.

“These numbers provide more evidence of deceleration,” said Karl Schamotta, chief market strategist at Cambridge Global Payments in Toronto.

“In continuing to print above expectations, weekly claims are suggesting a loss of momentum in the U.S. labor market – something that could push Federal Reserve tightening plans further into the future and put further pressure on bond yields,” he added.

Elsewhere, growth-focused currencies such as the Australian dollar gained as a global risk sell-off abated further. The Aussie dollar was last up 0.1% at US$0.7370.

The gains in higher-risk assets come after robust company earnings lifted Wall Street and European bourses, allowing investors to look past concerns that the Delta Covid-19 variant would dampen the economic recovery.

“The consensus is that (the Delta strain) does not pose an immediate risk to the recovery,” delaying reopening by three months at the most as countries ramp up vaccination drives,” National Australia Bank analyst Tapas Strickland told clients.

Sterling firmed 0.3% to $1.3755, recovering from 5-1/2-month troughs while in cryptocurrencies, bitcoin slipped into negative territory after Wednesday’s 7.9% jump – the biggest since mid-June. It was last flat at $32,137.

The dollar slipped 0.1% against the yen, another safe haven, to 110.15 yen.

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Currency bid prices at 10:23AM (1423 GMT)

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change

Session

Dollar index 92.7180 92.8030 -0.08% 3.042% +92.8680 +92.5040

Euro/Dollar $1.1797 $1.1789 +0.07% -3.45% +$1.1831 +$1.1771

Dollar/Yen 110.1550 110.2800 -0.11% +6.62% +110.3550 +110.0200

Euro/Yen 129.94 130.09 -0.12% +2.39% +130.2900 +129.7300

Dollar/Swiss 0.9181 0.9177 +0.08% +3.81% +0.9198 +0.9156

Sterling/Dollar $1.3758 $1.3713 +0.29% +0.67% +$1.3787 +$1.3691

Dollar/Canadian 1.2583 1.2561 +0.21% -1.15% +1.2593 +1.2530

Aussie/Dollar $0.7372 $0.7360 +0.18% -4.15% +$0.7397 +$0.7343

Euro/Swiss 1.0829 1.0821 +0.07% +0.20% +1.0840 +1.0814

Euro/Sterling 0.8572 0.8600 -0.33% -4.08% +0.8609 +0.8551

NZ $0.6958 $0.6972 -0.23% -3.13% +$0.6985 +$0.6947

Dollar/Dollar

Dollar/Norway 8.8485 8.8785 -0.25% +3.13% +8.8915 +8.7790

Euro/Norway 10.4382 10.4700 -0.30% -0.28% +10.5235 +10.3500

Dollar/Sweden 8.6681 8.6876 -0.13% +5.76% +8.7004 +8.6452

Euro/Sweden 10.2252 10.2386 -0.13% +1.48% +10.2538 +10.2228

(Reporting by Gertrude Chavez-Dreyfuss in New York and Sujata Rao in London; Additional reporting by Tommy Wilkes; Editing by Bernadette Baum and Mark Heinrich)