Jan. 11 (Bloomberg) -- The euro pared its advance against the dollar after European Central Bank President Jean-Claude Trichet highlighted risks to the outlook for growth.

The central bank kept rates at 3.5 percent today, as expected, after lifting them six times since December 2005. Policy makers next meet Feb. 8. The main risks to the region's growth outlook are to the ``downside,'' Trichet said. The euro rallied 13 percent versus the yen last year on prospects the ECB would raise borrowing costs faster than the Bank of Japan.

``I don't expect Trichet to heighten expectations for a rate hike next month,'' said Jeremy Stretch, a currency strategist at Rabobank Groep in London. ``The euro won't get much support from this press conference.''

The euro traded at $1.2929 against the dollar as of 1:51 p.m. in London, from $1.2938 late yesterday in New York. It was also at 155.70 yen, from 154.77, after touching a record high of 158.05 on Jan. 3. The dollar traded at 120.41 yen, from 119.64.

To contact the reporter on this story: Kabir Chibber in London at kchibber@bloomberg.net.

Last Updated: January 11, 2007 08:53 EST