FOREX-Dollar on defensive as investors await U.S. jobs data

* Dollar on backfoot as vaccine hopes and data boost mood
* Few willing to take risks ahead of U.S. payrolls data
* Figures due at 1230 GMT, consensus f'cast for +3 mln jobs
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

By Hideyuki Sano and Tom Westbrook
TOKYO/SINGAPORE, July 2 (Reuters) - The dollar was on the
defensive against more growth-sensitive currencies on Thursday,
following upbeat U.S. and European economic data, though worries
about the coronavirus blunted more aggressive risk taking ahead
of upcoming U.S. jobs figures.
The New Zealand dollar NZD=D3 led modest gains in Asia,
edging ahead by 0.2% to a one-week high of $0.6492. AUD/
Against a basket of currencies, the greenback slipped
marginally and is tracking toward its worst week in a month,
with a 0.4% fall - though it could shift significantly in either
direction depending on U.S. jobs data due at 1230 GMT.
Non-farm payrolls figures are expected to show an increase
of 3 million jobs last month. But estimates vary widely and the
data comes as concerns grow about whether the U.S. economy can
sustain its recovery as coronavirus infections surge and some
states reimpose limits on business and personal activity.
"Any reasonable reaction to this number must also price in
the resurgence in cases," said Vishnu Varathan, head of
economics at Mizuho Bank in Singapore, adding that a strong beat
is needed to boost sentiment.
"A shortfall, particularly even one that may be mildly
negative, would quickly reinforce the shadows of doubt being
cast on plans for unfettered re-openings," he said.
A miss would probably push U.S. Treasury yields lower,
Varathan added, but he said the dollar's response is less
predictable and dependent on whether investors regard hiccups in
the U.S. recovery as a challenge to the global rebound.
"Given the programmes in place, a weak number is
unambiguously weak," said Steve Englander, global head of G10 FX
research at Standard Chartered in New York.
"A strong number could reflect economic improvement or
fiscal incentives to hire."

FINE BALANCE
Supporting sentiment in the meantime was news that a
COVID-19 vaccine developed by German biotech firm BioNTech
BNTX.O and U.S. pharmaceutical giant Pfizer PFE.N showed
potential in early-stage human trials. U.S. manufacturing activity also rebounded more than
expected in June, with the Institute for Supply Management's
manufacturing activity index hitting its highest in 14 months.
Similar surveys from China, Germany and France all pointed
to an improvement in factory activity, while the ADP National
Employment Report showed June private payrolls added nearly 2.4
million jobs. Still, re-openings are stalling in the U.S. as case numbers
surge. New cases of COVID-19, the illness caused by the
coronavirus, shot up by nearly 50,000 on Wednesday, the biggest
one-day spike since the start of the pandemic.
The safe-haven Japanese yen JPY= hung on to overnight
gains to hold steady at 107.53 yen per dollar, pointing to
elevated investor caution.
Elsewhere the euro changed hands at $1.1257 EUR= ,
maintaining its gain of 0.3% since the start of week.
The mood also lifted sterling GBP=D4 above $1.25 for the
first time in a week, and it last sat at $1.2483, having bounced
almost 2% from a one-month low hit on Monday.
Analysts expect the pound could be about 4% stronger in a
year's time, if Britain and the European Union can thrash out a
trade deal, a Reuters poll has found. Broadly, poll respondents expect the dollar to slowly
decline over the coming year, though that depends on there being
no second shock from the coronavirus. "If we see further spikes in coronavirus cases, I would
expect both the dollar and the yen to strengthen against other
currencies," said Tohru Sasaki, head of Japan market research at
J.P. Morgan