FOREX-Euro holds gains on speculation of solid US jobs data

The euro held on to recent gains on Friday, supported by expectations that U.S. jobs data would show the economy slowly recovering, but it struggled to extend its rally in the absence of a comprehensive solution to the euro zone debt crisis.

Trading ranges were tight early in the European session, as few investors were willing to buy the single currency aggressively given that it has already rallied more than 1 percent so far this week.

The non-farm payrolls report due at 1330 GMT is expected to show an increase of 122,000 jobs and a steady unemployment rate of 9.0 percent.

A positive surprise would underpin a recent string of solid U.S. data and bolster risk sentiment, which might prompt some selling in the dollar. A weaker-than-expected outcome may push investors to take more profits on recent euro gains.

Johan Javeus, chief strategist at SEB in Stockholm, said he expected the data would confirm the U.S. economy is faring better than it was in the first half of the year, although it would not show a very strong recovery trajectory. more