CORRECTED-FOREX-Euro heads for best week in 2019 before U.S. jobs data

(Corrects to show U.S. non-farm payrolls data due out at 1230
GMT not 1430 GMT)
* U.S. payroll data at 1430 GMT may show drop in hiring
* Euro set for best weekly performance since September 2018
* Analysts divided on dollar's near-term direction
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

By Tom Finn
LONDON, June 7 (Reuters) - The euro was headed for its best
week since September on Friday, largely due to weakness in the
dollar which could fall later in the day if U.S. jobs data
disappoints.
U.S. non-farm payrolls data for May due out at 1230 GMT are
expected to show a drop in hiring which, investors say, could
bolster the case for a Federal Reserve interest rate cut this
year.
The prospects of the Fed reacting to an escalating
China-U.S. trade row by cutting rates has dragged the dollar to
a two-month low this week and helped the euro rise above $1.13.
The dollar was marginally up on the day but still headed for
its worst week since March.
The euro, meanwhile, relinquished all its gains from
Thursday after a policy review by the European Central Bank that
was less dovish than expected.
It was down 0.1% to $1.1269 but still set for a weekly gain
of 0.9%, its best weekly performance against the dollar since
late September last year.
"The NFP series, more than most, tends to hold up until it
falls off the edge of a cliff, and that cliff is getting
closer," said Societe Generale strategist Kit Juckes.
A slowdown in the U.S. labour market was evident in a
worse-than-expected ADP National Employment Report released on
Wednesday. Others were more sanguine about the dollar's prospects.
"I believe the market's assumption that the Fed is going to
cut interest rates soon is premature. For now, the Fed can
afford to remain patient," said Marshall Gittler, an analyst at
ACLS Global.
"I would expect the dollar to recover over the medium term,
although it may take some time before people realize that a rate
cut is not imminent."
The ECB on Thursday ruled out raising rates in the next year
and even opened the door to buying more bonds as a global trade
war and Brexit drag the euro zone economy down. But the market been expecting a stronger hint of a rate cut,
and consequently the euro and euro zone bond yields rose,
putting more pressure on the dollar.
Against a basket of six other currencies, the dollar was
steady at 97.115 .DXY , trading about 0.3% above Wednesday's
eight-week low of 96.749.
The index was on course for a 0.72% loss this week, its
worst weekly performance since the week of March 15, when it
gave up 0.73%.