* Euro steady vs dollar before ECB rate decision
* ECB seen keeping rates at 2%
* BoE seen likely cutting rates 50 bps to 1%
By Masayuki Kitano
TOKYO, Feb 5 (Reuters) - The euro was steady against the dollar on Thursday, after falling sharply the previous day due to a downgrade of Russia's sovereign rating, as investors awaited a rate decision by the European Central Bank.
The euro came under heavy pressure on Wednesday after Fitch Ratings downgraded Russia's sovereign rating, underscoring worries that a sharp downturn in Eastern Europe could hit the euro zone economy hard.
The euro was also hurt by Kazakhstan's central bank's decision to devalue the Central Asian country's tenge currency by about 18 percent on Wednesday.
"Heightening worries about economies and currencies in eastern and central Europe such as Russia and Kazakhstan tend to spur euro selling and yen buying," said Masafumi Yamamoto, head of foreign exchange strategy in Japan for the Royal Bank of Scotland, in a research note.
The euro is likely to stay weak against the yen, he added.
The euro held steady from late U.S. trading at $1.2828, after falling more than 1.4 percent on Wednesday and basically erasing the gains it made on Tuesday.
Against the Japanese currency, the euro dipped 0.1 percent to 114.69 yen.
The dollar eased 0.1 percent to 89.42 yen.
"The euro seems to have a hard time staying above $1.3000," said a trader for a Japanese trust bank.
The euro has fallen roughly 8 percent so far this year, and a fall below $1.2706 on trading platform EBS would take the single European currency to a two-month low.
The ECB is widely expected to keep interest rates at 2.0 percent when its rate decision is announced later on Thursday.
Sterling dipped 0.2 percent to $1.4443, ahead of the Bank of England's rate decision later on Thursday. The BoE is seen likely to cut rates by 50 basis points to 1.0 percent. (Editing by Brent Kininmont)