* Euro up 0.2 pct to $1.3253 <EUR=>
* U.S. nonfarm payrolls seen rising by 140,000
* ECB bond buying, euro zone data underpins euro
* Euro downtrend still seen intact over medium-term
(Adds quote, updates prices)
By Tamawa Desai
LONDON, Dec 3 (Reuters) - The euro edged up on Friday as the
European Central Bank continued buying Portuguese and Irish
government bonds, easing euro zone debt concerns and helping the
currency rebound from a 2-1/2 month low hit earlier this week.
But price movements were limited ahead of U.S. payrolls
data, especially after a firm ADP jobs report earlier in the
week, and a surprisingly strong U.S. housing number on Thursday
adding to views of a U.S. economic recovery.
"Expectations are creeping up so a (nonfarm payrolls) number
bigger than 150,000 would be needed to get any market reaction,"
said Ian Stannard, senior currency strategist at BNP Paribas.
He said the dollar/yen pair would be most sensitive to the
data, with a recent high around 84.40 yen as a level to watch.
A further rise above 3 percent in 10-year U.S. Treasury
yields <US10YT=RR> would also boost the dollar against the
Japanese unit, he added.
A Reuters poll showed U.S. nonfarm payrolls would increase by
140,000 in November, rising for the second month amid strong
gains in private hiring. []. The jobless rate is
expected to remain at 9.6 percent.
The dollar changed hands at 83.50 yen <JPY=>, down 0.4
percent from late U.S. levels by 1205 GMT, off Monday's
two-month high of 84.41 yen. Strong support was seen at the top
end of the pair's Ichimoku cloud at around 83.18.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Euro zone debt timeline: http://link.reuters.com/nyx95q
Euro zone crisis coverage http://r.reuters.com/hus75h
Graphic on debt crunch: http://r.reuters.com/zem66q
U.S. payrolls preview http://r.reuters.com/veg48q
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
EURO UNDERPINNED
The euro was underpinned as risk premiums on government
bonds issued by euro zone periphery states fell on Friday, with
further bond buying by the European Central Bank reassuring
investors. []
A rise in euro zone service sector activity [],
retail sales [] and the Bundesbank raising
Germany's growth forecasts for this year [] also
supported the single currency, as investors' immediate concerns
about the euro zone were alleviated.
The euro rose 0.2 percent on the day at $1.3252 <EUR=>,
remaining above a 2-1/2 month low of $1.2969 hit on Tuesday
after massive selling in euro zone periphery government bonds.
Large euro/dollar option expiries at $1.3200 and $1.3250
were slowing the rally, while the technical picture was helped
by the euro holding above its 200-day moving average at $1.3123.
But many analysts were not persuaded the euro had turned a
corner.
"The ECB has done a good job in reassuring the markets this
week and the euro zone PMI this morning has also helped, but the
euro is not out of the woods yet," said Jane Foley, senior
currency analyst at Rabobank.
(Additional reporting by Neal Armstrong; editing by Stephen
Nisbet and Toby Chopra)
