* Dollar inches up but set for 4th straight weekly fall
* Yen pushed lower as Bank of Japan buys bonds
* U.S. payrolls expected to be robust 175,000
* Graphic: World FX rates in 2016 tmsnrt.rs/2egbfVh
By Marc Jones
LONDON, Feb 3 The dollar inched fractionally
higher on Friday, as it limped towards U.S. jobs data facing its
fourth straight weekly fall in what has already been its worst
start to a year in three decades.
The U.S. currency has been hit hard by worries about both
Donald Trump's presidential style and a lack of clarity from the
Federal Reserve this week about when it is likely to next raise
The non-farm payrolls report due at 1330 GMT is expected to
show employers added 175,000 jobs in January, figures that if
achieved are likely to be robust enough to give markets
confidence in bets on of a hike at least by June.
The dollar index which tracks it versus six top currencies
was up 0.15 percent with most of the traction coming from a 0.3
percent rise to 113.13 yen as the Bank of Japan made a
surprise move to push down its government bond yields.
But it made little difference to what was set to be its
first unbroken run of four weekly falls at the index level in
two years that has driven it down almost 3 percent since the
start of the year.
"Markets are now really seeing the downside of Trump,
especially the immigration orders," said Rabobank U.S.-focused
economist Philip Marey.
He added the upcoming non-farm payrolls data should reassure
the Fed especially if broader employment and wage rates rise.
"But it is also important they know which way the fiscal winds
are blowing and of course they don't at the moment.
One of the main beneficiaries of the dollar's wobble has
been the euro.
It was set for its sixth week of gains in seven, at $1.0745
and having gone as high as $1.0829 after the latest signs growth
and inflation is rising in the euro zone. That has a read-across
for the European Central Bank's stimulus programme.
Britain's sterling was licking its wounds after a bruising
few days that has brought this year's mini-rally to a halt.
Having suffered its worst day October on Thursday it was
knocked again as data on the UK's dominant services sector fell
for its first time in four months. It squeezed the pound below
$1.25 and to 86 pence per euro on course for
near 1 percent weekly drop.
"It was surely too early for markets to expect a
significantly more hawkish narrative," from the Bank of England
which on Thursday signalled little urgency to rate UK interest
rates, analysts from Bank of America Merrill Lynch said.
"A benign interpretation of the Brexit process and strong UK
data had perhaps lulled the sterling market into a false sense
of near-term security."
For Reuters Live Markets blog on European and UK stock
markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets
(Editing by Jeremy Gaunt)