* Dollar little changed vs euro, currency basket

* U.S. currency holds gains after strong payrolls

* Analysts see consolidation ahead of Fed meet

The dollar held gains against the euro and a currency basket on Monday following a broad rally late last week on surprisingly strong U.S. jobs figures.

Despite slipping a touch against the yen, the U.S. currency was supported by data showing a smaller-than-expected fall in U.S. payrolls, which suggested employment may be turning the corner after months of extreme weakness.

We had a big move on Friday, so we'll be seeing some consolidation today, said Martin McMahon, currency strategist at Credit Suisse in Zurich, adding that the dollar may be prone to some profit taking on Monday.

He said investors wanted to see if the dollar's latest move was a sign of a breakdown of the recent correlation between the U.S. currency and risk demand -- in which economic data suggesting an improving global economy would batter the dollar as it would increase risk appetite.

By 0929 GMT, the euro EUR= was little changed at $1.4185, hovering near a one-week low around $1.4154 hit on electronic trading platform EBS in the aftermath Friday's data.

The euro brushed off a surprisingly strong reading of euro zone sentiment on Monday. The Sentix index produced a -17 reading for August, improving from -31.30 last month.

The pair traded well off the year's high of $1.4448 hit earlier last week, with a 0.5 percent fall in European shares .FTEU3 on Monday helping to limit gains in the euro.

Against a currency basket .DXY, the dollar was little changed at 78.869, while the U.S. currency JPY= inched down 0.3 percent against the yen to 97.30 yen, after rallying as high as 97.79 yen, its strongest in nearly eight weeks, on Friday.

Dollar selling by Japanese exporters in the Tokyo session weighed on early dollar/yen trade, but the dollar pulled away from the day's low around 97.10 yen in Europe.

Some analysts said a post-payrolls rise in Treasury yields helped to support the dollar as it increased the appeal of U.S. debt for some investors, including those from overseas FED AWAITED

Analysts said that whether the dollar extends its latest gains may hinge on the actions of the Federal Reserve, which ends a two-day policy meeting on Wednesday.

The Fed is seen ending its plan to buy $300 billion of longer-dated Treasuries in September, but some saw the possibility that it may discuss extending a separate program to promote the flow of credit to consumers and businesses.

Analysts expect the Fed to hold the fed funds rate at 0-0.25 percent, and some say it may try to discourage speculation of a near-term rate rise, after the payrolls boosted expectations of possible monetary tightening early next year [ID:nN07416548].

Analysts at Barclays Capital said the proximity of the payrolls and the Fed meet may explain the dollar's broad jump.

A dovish stance by the Fed may prompt a correction in the dollar, showing that last week's boost was temporary, they said, while pointing out that the striking pace of improvement in both the U.S. and global economy may be dollar-supportive.

Our US economists expect no increase in asset purchases and a more upbeat tone on the economy, they said in a note.

In our view this would likely be a USD positive and may herald a period where positive news for U.S. yields continues to be a USD positive.

The Bank of Japan will announce its rate decision on Tuesday, while Norway's central bank will end a policy meeting on Wednesday. (Editing by Victoria Main)