* Dollar index climbs from 3-week lows, focus on U.S. jobs
* Forecasts centre on 210,000 non-farm payroll adds in April
* GBP holds near 5-year peak, may rally if U.S. data
(Updates, adds euro zone data)
By Anirban Nag
LONDON, May 2 The dollar rose against the yen
and recovered from three-week lows against a basket of
currencies on Friday on expectations of a robust U.S. jobs
number, which would lift some of the gloom caused by a weak
growth report earlier this week.
Volumes were low ahead of the data which, according to a
Reuters poll, is expected to show 210,000 jobs were added in
April, well above the first-quarter monthly average of
An in-line reading would support the dollar as it would
confirm the U.S. economy was on the mend after a harsh winter,
traders said, and dollar bulls could look forward to a good
The dollar index rose 0.1 percent to 79.594, having
fallen to 79.414 on Thursday, its lowest since April 11. The
dollar rose 0.2 percent against the yen to 102.55 yen,
near the middle of the range it has traded in since February.
The euro was marginally lower at $1.3860, mostly
unmoved by euro zone purchasing managers' index (PMI) while
sterling, which hit a near five-year high of $1.6921 on Thursday
was 0.1 percent lower at $1.6875.
"The bias is for a good jobs report, upwards of 200,000,
given all the indicators ranging from the weekly jobless claims
to the ADP to the employment segment of the ISM survey," said
Jeremy Stretch, head of currency strategy at CIBC World Markets.
The Institute for Supply Management (ISM) said on Thursday
its employment subindex jumped to 54.7 from March's 51.1, which
had been the weakest since June 2013. Analysts were looking for
"Where the risk lies for the dollar is if there is a
considerable undershoot (in payrolls). That will drag down U.S.
yields and we could see dollar/yen tumble, sterling rise past
Thursday's highs and euro back above $1.39," Stretch added.
STERLING SLIPS, SWEDISH CROWN SOFT
Major currencies showed limited reaction to latest
developments in Ukraine, where government forces launched an
operation to retake Slaviansk, pro-Russian separatists holding
the town in eastern Ukraine said on Friday.
A big mover was the Swedish crown, which fell after more
disappointing data. Sweden's purchasing managers' index (PMI)
fell to 55.5 points for the manufacturing sector in April from
56.5 points in March.
The euro rose 0.2 percent to 9.0520 crowns amid
higher-than-usual volumes on the Reuters Matching platform. It
was last trading at 9.0235, still firmer on the day.
Sterling, which hit highs against the dollar on Thursday in
the wake of upbeat UK economic indicators and strong
expectations of rate hikes early next year, took a breather.
The UK construction sector PMI fell short of expectations
but hawkish comments from a senior BoE official about the
country's housing sector lent the pound solid support at around
"Sterling could be the big winner were non-farm payrolls to
disappoint today and perhaps an intra-Europe trade on the back
of a stronger NFP could be long sterling/Swiss franc," Chris
Turner, head of FX strategy at ING, said in a note.
(Editing by Toby Chopra)