FOREX-Dollar slips a bit like strapping payroll MKT U.S.

LONDON - The dollar was weakened slightly in average trading Friday before U.S. employment figures could set the tone for the dollar - and other financial markets - for the rest of the month.

Intervals of exchange between currencies in early European trade were tight, however, investors are reluctant to put on large positions ahead of the August data does not farm.

The euro regained some of its previous day's losses caused by comments of the President of the European Central Bank Jean-Claude Trichet, suggested that prospects for growth, inflation and credit conditions keep Thus the policy and interest rates market low for some time.

And the yen moved down from its seven-week high against the dollar hit earlier this week, with traders eyeing the dollar / yen options expiries worth $ 1 trillion later Friday, including strikes worth $ 800 million ¥ 91.60.

But the focus is firmly on the dollar and how it reacts to U.S. employment figures. For example, will conduct a sale of the weak dollar relative to expectations trigger, or will polish the status of safe-haven in a climate of rising risk aversion?

"In the current context of feeling slightly positive on the dollar, the (relatively strong data) can be positive for the dollar," said Carole LAULHERE, currency strategist at Societe Generale in Paris.

Every dollar strength is a positive surprise data mark a further step on the path to the option of regime "in the relationship between the dollar, economic data and market large exposures" feeling, "strategists at Citigroup reckon.

"The episode will be crucial in judging the extent to which the valve system expected, the risk to the business cycle business cycle is doing. We expect the dollar oz focus moves to strengthen the market for Outperformance likely the U.S. economy, "They said in a statement on Friday.

At 0805 GMT, the dollar index fell 0.1 percent, to 78.38. DXY.

The euro rose 0.1 percent in euro = 1.4270 U.S. dollars, with dealers reporting good sales ahead of pre-order automatic buy $ 1.4310.