LONDON: The dollar rose against the yen and recovered from three-week lows against a basket of currencies on Friday on expectations of a robust US 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 177,667..
An in-line reading would support the dollar as it would confirm the US economy was on the mend after a harsh winter, traders said, and dollar bulls could look forward to a good second quarter.
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 52.8.
"Where the risk lies for the dollar is if there is a considerable undershoot (in payrolls). That will drag down US 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 $1.6850.
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