FOREX-US dollar rises as jobs data dulls market optimism

* Dollar rises as U.S. data shows more job losses

* Yen turns lower vs euro, pound gains after UK data

* Post G-20 optimism fades after data

(Adds quotes, updates prices, changes byline)

By Steven C. Johnson

NEW YORK, April 3 (Reuters) - The U.S. dollar rose against most currencies on Friday as data showed the United States continued to hemorrhage jobs in March, dulling recent hopes of a nascent recovery and enhancing the greenback's safe-haven appeal.

The dollar rose above 100 yen after the data, which showed employers cut 663,000 jobs in March, driving the jobless rate to 8.5 percent, the highest since 1983. [ID:nN02368781]

"It's a pretty awful number," said Matt Esteve, a trader at Tempus Consulting in Washington. "What is really important is the unemployment rate -- at 8.5 percent, it is just too high."

Still, Esteve said other U.S. economic data of late has narrowly beat expectations, leading some to hope the U.S. economy may be in better shape than others, particularly Japan's which has seen growth dry up as exports plummet.

The dollar was last up 0.3 percent at 99.88 yen JPY= after earlier rising as high as 100.26 yen, a five-month peak. The euro fell 0.6 percent to $1.3390 EUR=, though sterling was up 0.3 percent at $1.4773 GBP= as better-than-expected UK services sector data lent support.

The dollar tends to rise in response to bad news because investors see it as the safest store of value at a time when economies across the globe are contracting sharply.

The jobs report dimmed slightly a growing sense of optimism that swelled a day ago as leaders from 20 high-income and developing countries announced a $1.1 trillion deal to fight the economic crisis, spurring gains in world stock markets.

Some analysts, though, said limited improvement in the U.S. economy may eventually start to hurt the dollar, too.

"Interestingly, the U.S. unemployment rate has now risen above that of Germany and the euro zone, a historic feat that only gauges the extent of the macro economic damage in the U.S.," said Ashraf Laidi, chief market strategist at CMC Markets in London.

(Additional reporting by Vivianne Rodrigues and Nick Olivari)