March 3 (Bloomberg) -- The dollar held near a 10-day high versus the euro in Asia on expectations a government report will show U.S. jobless claims fell close to a four-year low.

The U.S. currency yesterday rose for a third day against the euro as Federal Reserve Chairman Alan Greenspan said the economy is expanding at a ``reasonably good pace.'' The dollar may extend its advance this year on speculation the U.S. is creating more jobs to spur growth, prompting the Fed to add to its six interest- rate increases since June.

``We're looking for further improvement in the U.S. labor market,'' said Tetsu Aikawa, a currency sales manager in Tokyo at UFJ Bank Ltd., a unit of Japan's fourth-largest lender. ``The U.S. economy will be in good shape, and interest rates are going to keep on rising. The dollar will be supported.''

Against the euro, the dollar traded at $1.3130 at 1:21 p.m. in Tokyo, from $1.3142 late yesterday in New York, according to EBS, an electronic foreign-exchange dealing system. The U.S. currency yesterday rose to $1.3088, its strongest since Feb. 22. It was at 104.94 yen from 104.74. The dollar may gain to $1.3080 per euro and 105.10 yen today, Aikawa said.

The number of Americans filing first-time claims for unemployment insurance probably fell to 310,000 from 312,000, according to the median of 38 estimates in a Bloomberg News survey of economists. The Labor Department is scheduled to release the figure at 8:30 a.m. in Washington. Claims fell to 303,000 during the week ended Feb. 12, the lowest in more than four years.

Dollar Gains

The dollar is up 3.2 percent against the euro and 2.2 percent versus the yen this year, after falling for three years to Dec. 31.

``The economy is now developing its own momentum,'' Greenspan told the House Budget Committee in Washington.

U.S. employers probably added 225,000 workers to payrolls in February, the most since October, according to the median forecast of 68 economists surveyed by the Bloomberg News before the release of the data tomorrow.

``We're finally creating jobs,'' former Fed Bank of Dallas President Robert McTeer said in an interview with Bloomberg News yesterday.

Any gain in the dollar against the yen may be limited after a government report showed overseas investors were net buyers of Japanese shares for a 19th week during the seven days ended Feb. 25.

The Nikkei 225 Stock Average rose to an eight-month high, extending its longest winning streak this year on signs the world's second-largest economy will pull out of last year's recession.

Signs of Growth

Household spending rose by the most in nine months and unemployment held at a six-year low, reports on March 1 showed.

``Overseas investors' appetite for Japanese shares will put pressure on the yen to rise,'' said Takashi Toyahara, a currency trader in Tokyo at Nomura Securities Co., Japan's biggest broker. Reports have trigged ``renewed optimism on the Japanese economy.'' The yen may gain to 102 per dollar in a month, he said.

Demand for the euro may wane on expectations the European Central Bank today will leave its benchmark interest rate at a six-decade low of 2 percent as the economy stagnates, according to all 34 economists surveyed by Bloomberg. The Fed raised its overnight lending rate between banks to 2.5 percent on Feb. 2.

The ECB cut its 2005 economic growth forecast for the euro region to around 1.6 percent from 1.9 percent, and its inflation projection to about 1.9 percent from 2 percent, Market News International said yesterday, citing unidentified people at the bank. The economy grew 2 percent last year.

`Vulnerable'

The ECB will announce its rate decision in a conference call at 1:45 p.m. in Frankfurt. ECB President Jean-Claude Trichet will probably present the bank's new economic forecasts at a press conference 45 minutes later.

``The euro looks vulnerable,'' said Minoru Shioiri, senior manager of the treasury and foreign-exchange division in Tokyo at Mitsubishi Securities Co., a unit of Japan's second-biggest lender. ``I see little chance that Trichet will show a bullish outlook for the euro-zone economy.''

The Fed will raise its target for overnight lending between banks to 3.75 percent by Dec. 31, increasing the yield advantage of U.S. debt over the European counterpart, according to the median forecast of 70 economists polled by Bloomberg from Jan. 31 to Feb. 7.

To contact the reporter on this story: Taizo Hirose in Tokyo at Hirose2@bloomberg.net.

Last Updated: March 2, 2005 23:23 EST