News: FOREX-Dollar hovers below two-month highs ahead of U.S. payrolls report

• Graphic: World FX rates https://tmsnrt.rs/2RBWI5E

TOKYO, June 29 (Reuters) - The dollar edged up on Tuesday toward a two-month high versus major counterparts, with traders largely sidelined ahead of a key U.S. jobs report that could alter the timing of an exit from Federal Reserve stimulus.

The dollar index =USD , which tracks the greenback against a basket of six major currencies, added 0.1% to 91.966 in Asia, slowly closing the gap to the high of 92.408 reached on June 18 after the Federal Open Market Committee shocked markets by predicting two interest rate hikes by end-2023.

The Fed commentary since then has put the focus on the data to determine when a tapering of asset purchases and higher rates would be appropriate, with Chair Jerome Powell saying a weak ago that policymakers would not act on just the "fear" of inflation, and will encourage a "broad and inclusive" job market recovery.

The U.S. Labor Department is expected to report a gain of 690,000 jobs in June, compared with 559,000 in May, and an unemployment rate of 5.7% versus 5.8% in the previous month, according to a Reuters poll of economists.

Investors are also looking at U.S. consumer confidence data on Tuesday and the Institute for Supply Management's manufacturing index on Thursday for clues as to where interest rates are headed.

"Is it indeed that the dollar has bottomed and can only get stronger from here, or is it just a short-term positioning adustment? We've been arguing it's more a function of the latter," Paul Mackel, HSBC's global head of foreign-exchange research, said in a conference call with journalists.

With countries reopening from the coronavirus pandemic, the dollar should weaken toward the end of this year, he said.

"That's typically what happens when you have this synchronized global growth backdrop."

The dollar weakened 0.06% to 110.545 yen JPY=EBS , staying below a nearly 13-month high of 111.110 reached last week.

Both the dollar and yen benefited from some safe-haven demand as the more contagious Delta COVID-19 strain spread in Asia and elsewhere, stoking fears of further lockdowns.

The euro EUR=EBS declined 0.07% to $1.19145, edging back toward the 2-1/2-month low of $1.8470 touched on June 18.

"The market had been positioned long of the single currency on optimism regarding the vaccine catch-up trade in the region (but) forecasts that the Delta variant of COVID could spread through Europe (in) the summer months could now be undermining confidence in this trade," Rabobank strategist Jane Foley wrote in a report, cutting a one-month euro forecast to $1.19 from $1.20.

"Assuming the U.S. data remains broadly supportive, we expect the USD to grind moderately higher vs. the EUR though the course of the year."

Elsewhere, sterling GBP=D3 slipped back toward a two-month low, weakening 0.06% to $1.38695.

The Australian dollar AUD=D3 , seen as a liquid proxy for risk appetite, fell 0.09% to $0.75580 after sliding 0.31% at the start of the week amid concerns over renewed COVID-19 lockdowns across parts of the country.

The kiwi dollar NZD=D3 dropped 0.19% to $0.70280, adding to its 0.40% slide on Monday. Previously it enjoyed a five-day winning run after rebounding from the lowest level since November.

"We expect the RBNZ to start tightening monetary policy more than one year before the FOMC, which is a tailwind for the NZD," CBA analyst Kim Mundy wrote in a client note.

"The RBNZ is the most hawkish central bank under our coverage."

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	Currency bid prices at 0532 GMT 

 Description	  RIC		 Last		   U.S. Close  Pct Change	 YTD Pct	 High Bid	Low Bid 
											  Previous				   Change				  
											  Session											
 Euro/Dollar	   EUR=EBS	$1.1918		$1.1923	 -0.04%		 -2.46%	  +1.1930	 +1.1908 
 Dollar/Yen		JPY=EBS	110.5300	   110.5500	+0.03%		 +7.06%	  +110.6300   +110.4700 
 Euro/Yen		 																			 
 Dollar/Swiss	  CHF=EBS	0.9198		 0.9200	  +0.04%		 +4.02%	  +0.9207	 +0.9196 
 Sterling/Dollar   GBP=D3	 1.3874		 1.3880	  -0.06%		 +1.53%	  +1.3882	 +1.3859 
 Dollar/Canadian   CAD=D3	 1.2336		 1.2342	  -0.02%		 -3.09%	  +1.2348	 +1.2333 
 Aussie/Dollar	 AUD=D3	 0.7560		 0.7565	  -0.07%		 -1.72%	  +0.7570	 +0.7550 
 NZ				NZD=D3	 0.7032		 0.7042	  -0.19%		 -2.12%	  +0.7051	 +0.7023 
 Dollar/Dollar																				   

All spots FX= Tokyo spots AFX= Europe spots EFX= Volatilities FXVOL= Tokyo Forex market info from BOJ TKYFX

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World FX rates	https://tmsnrt.rs/2RBWI5E 

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