LONDON, Nov 16, 2007 (AFP) - The dollar steadied against major rivals on Friday as the market continued to track credit market concerns, traders said.

In early European trade, the euro eased to 1.4605 dollars, from 1.4609 dollars in New York late on Thursday.

The dollar dipped to 110.18 yen from 110.26 Thursday.

"The mood pervading the market does seem to be shifting ever so slightly to one of greater pessimism" for the global economy, said Gavin Friend at Commerzbank.

"Amid this defensive mood, the dollar can defend its gains ahead of the weekend and consolidate since today's data may not be decisive enough for another round of aggressive dollar sales," he added.

US economic news due Friday includes industrial production figures.

The US unit had gained Thursday from a recent slump after sturdy US inflation figures, which will make it more difficult for the Federal Reserve to keep slashing interest rates.

But amid continued worries about a liquidity squeeze from the subprime loan crisis, the Federal Reserve on Thursday made its largest one-day injection into the banking system since the September 11, 2001 attacks.

Traders shunned risky assets after Wall Street's overnight slump, which was triggered by the rising inflation and write-downs by banks and mortgage lenders exposed to the shaky subprime US home market.

"A worsening in investor risk-appetite on credit market concerns and worries over corporate earnings triggered another bout of carry trade unwinding," said NAB Capital John Kyriakopoulos in a market note.

In carry trades, currency traders invest in countries with high interest rates or in countries where rates are perceived to be moving higher which generally enables them to reap better yields on their investments.

Market participants were also concerned over the health of US consumption -- the main driver of the US economy -- after modest retail sales data.

Investors also had their attention turned to the weekend meeting in South Africa of finance ministers of the Group of 20 developing nations.

Currencies are set to be on the discussion table, although traders do not expect concerted policy action.

In European trade Friday, the euro changed hands at 1.4605 dollars, against 1.4609 late on Thursday, at 160.81 yen (161.10), 0.7154 pounds (0.7143) and 1.6407 Swiss francs (1.6401).

The dollar stood at 110.18 yen (110.26) and 1.1225 Swiss francs (1.1222).

The pound was at 2.0434 dollars (2.0448).

In London, the price of gold dropped to 790.70 dollars per ounce, from 794 dollars late on Thursday.