FOREX-Dollar rises to 5-wk high vs euro, buoyed by US data

* Dollar rises after U.S. nonfarm payrolls report

* U.S. manufacturing activity holds steady in July

* Yen rises broadly as risk aversion increases (Recasts, updates prices, adds comments, changes byline)

By Gertrude Chavez-Dreyfuss

NEW YORK, Aug 1 (Reuters) - The U.S. dollar climbed to five-week peaks against the euro and three-week highs against the British pound on Friday as better-than-expected economic data allayed worries about a much sharper slowdown.

The yen, on the other hand, gained broadly, benefiting from heightened stress in financial markets on news that General Motors (GM.N) had hefty losses in the second quarter. That dragged U.S. stocks lower and triggered safe-haven bids for Treasuries.

"U.S. dollar sentiment has certainly changed for the better over the last couple of weeks," said Mark Frey, head foreign exchange trader at Custom House, a global payments dealer in Victoria, British Columbia.

"The U.S. economy has gone through some tough phases, but the jobs number was negative, but still better than expected. I think, more importantly, recent consumer confidence numbers and leading indicators, which are more forward-looking, have been more positive," he added.

Friday's data showed that U.S. employers eliminated 51,000 jobs in July, lower than market expectations for a payrolls decline of 75,000. A separate report said U.S. factory activity was unchanged in July, compared with the previous month, but above market forecasts. For details, see [ID:nN01429062].