* Dollar hits over four-week high versus yen, takes out 100-yen barrier * Fed's Dudley says recovery would need to stumble badly to spur more stimulus * Australian dollar falls as RBA hints at more rate cuts * Focus firmly on Friday's U.S. jobs data By Julie Haviv NEW YORK, July 2 (Reuters) - The dollar rose against a swath of currencies on Tuesday as a recent string of generally solid U.S. economic data gave credence to the view that the Federal Reserve will scale back its economic stimulus measures sooner than expected. The greenback rallied to a one-month high against the yen, with gains accelerating when it rose above the key 100-yen level for the first time since June 5, spurred by expectations of a reduction in the Fed's quantitative easing program. Investors are anxiously trying to gauge when the U.S. central bank will decrease its bond purchase program, after Fed Chairman Ben Bernanke last month outlined the Fed's conditional plan for withdrawing accommodation. Data this week provided fodder for the Fed reduction argument as reports showing a rebound in U.S. manufacturing and a rise in factory orders suggested the sector was stabilizing. Expectations of a reduction in the Fed's monthly $85 billion asset purchase program has lifted U.S. bond yields and enhanced the appeal of dollar assets, especially as other major central banks continue to lean toward further monetary easing. "Our sense is that the Fed comments and recent economic data are still consistent with the tapering message and that's positive for the dollar," said Vassili Serebriakov, currency strategist at BNP Paribas in New York. William Dudley, head of the powerful New York Fed, said on Tuesday the economic recovery would need to stumble badly to spur the U.S. Federal Reserve to ramp up the pace of its stimulative asset purchases. Dudley, a close ally of Bernanke and a permanent voter on Fed policy, also repeated comments he made last week, reiterating in a speech that the U.S. central bank will likely continue to support the economic recovery for some time. "The dollar has also been supported by the contrast in monetary policy between the Fed and the other major central banks. The U.S. is moving to a less dovish direction, while the other central banks are staying dovish or becoming even more dovish," Serebriakov added. In late afternoon New York trade, the dollar rose 0.9 percent to 100.58 yen, after hitting a peak of 100.72, the highest since June 3. The U.S. nonfarm payrolls report, due on Friday, was a key focus of financial markets, with investors expecting creation of 165,000 jobs in June and a lower unemployment rate at 7.5 percent. The Fed at its June 19 policy meeting lowered its unemployment rate forecast for 2014 to 6.5 percent. The dollar index, which tracks the greenback against a basket of six currencies, rose to 83.613, its highest since May 30. It was last at 83.548, up 0.6 percent. U.S. financial markets will close early on Wednesday and remain closed on Thursday in observance of the U.S. Independence Day holiday. Lower volume could spark greater volatility, especially with the release of Friday's jobs data. Foreign exchange options are looking at ranges 2.5 times a "normal" day for Friday's range on euro/dollar and three times a "normal" day for the dollar/yen, according to Alan Ruskin, head of foreign exchange strategy at Deutsche Bank in New York. "Normal" refers to the range that is expected for days where there are no special events. "Even given risks of holiday-induced reduced liquidity, this looks way too high, notably on euro/dollar, given Fed Chairman Bernanke has already let the tapering cat out the bag, and the data may vary the timing of the start to tapering by a single FOMC meeting, but probably not more," Ruskin said. The euro, meanwhile, fell to $1.2962, its lowest since June 3. It last traded at $1.2978, down 0.7 percent on the day, with traders wary before a European Central Bank meeting on Thursday. Analysts expect the ECB to keep interest rates steady. Some of the recent euro zone data were more upbeat than the numbers heading into the June meeting, which could persuade the central bank to hold off on further easing for now. Against the yen, the euro was up 0.2 percent at 130.42 yen . Meanwhile, the Australian dollar fell 1.0 percent to US$0.9142, not far from Monday's three-year low of US$0.9110, after the Reserve Bank of Australia kept the door open to rate cuts, in part due to a still-high currency. The Canadian dollar also stayed on the defensive, with the greenback hitting a 21-month high of C$1.0578. The U.S. dollar was last at C$1.0538, up 0.4 percent, according to Reuters data.