FOREX-Euro gains as dollar hobbled by economic worries; yuan jumps

* U.S. dollar nurses losses after jobs data disappoints

* Euro inches higher, focus shifts to upcoming PMI data

* China’s yuan hits seven-month high vs dollar

* Graphic: World FX rates in 2020

LONDON, Aug 21 (Reuters) - The euro inched higher on Friday with the dollar weighed down by concerns over the strength of a U.S. economic recovery following weaker-than-expected jobs data, while China’s yuan surged to a seven-month high as traders bet on Chinese growth.

Euro traders are preparing for euro zone manufacturing and services purchasing managers index (PMI) numbers for August due at 0800 GMT, which will highlight how the region’s economy is performing as lockdown measures ease.

A larger-than-expected rise in weekly jobless claims in the United States and warnings from Fed officials about a recovery in hiring have raised doubts about how quickly the world’s largest economy will bounce back from the coronavirus.

Those concerns, combined with an excess supply of dollars already in circulation, are likely to weigh on the greenback in coming weeks, analysts say.

The euro has been the biggest beneficiary - surging from under $1.12 in early July to above $1.19 this week.

Adam Cole, chief currency strategist at RBC Capital Markets, noted that euro zone July PMI survey data beat expectations for a third consecutive month but a slowing pace of recovery was evident in high-frequency data in Germany.

“At these levels, the euro would be very sensitive to downside surprises in these data,” Cole said.

The single currency was last up 0.1% at $1.1867, having touched a more than two-year high of $1.1966 earlier this week.

The dollar index, which measures the greenback against a basket of rivals, dropped slightly to 92.663. It is on course for its ninth consecutive weekly decline.

Republicans and Democrats are struggling to agree on additional stimulus to boost the economy, in contrast to the euro zone where investors have welcomed the scale of the economic packages recently launched.

The standout performer on Friday was China’s yuan, which in offshore markets briefly hit 6.8935, its strongest since Jan. 21.

China’s currency has recovered all of its losses since the Chinese city of Wuhan, where the coronavirus initially broke out, was first put on lockdown, as investors bet on a strong recovery in the country’s economy.

Sterling benefited from broad dollar weakness to move back up towards $1.3250. It was last up 0.2% at $1.3238 while it rose marginally versus the euro to 89.65 pence .

Currency moves elsewhere were contained. The dollar fell 0.2% versus the Japanese yen to 105.59. (Additional reporting by Stanley White in Tokyo; Editing by Kirsten Donovan)