* Greenback rises to one-week high vs euro
* Exception is Japanese yen, last flat vs dollar
* Euro zone PMIs expected to be confirmed at 51.6
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
By Olga Cotaga
LONDON, Sept 3 (Reuters) - The dollar's bounce extended on
Thursday as investors trimmed bets against the greenback and
sold the euro on concerns that the European Central Bank was
worried about its rise.
The surge has lifted the greenback about 1.3% above the
28-month low it hit against a basket of currencies on Tuesday.
Few analysts expect it to hold for too long, but the dollar
gained broadly in Asia and, if sustained, this would be the
first time it has climbed three sessions in a row since May.
After the euro touched $1.20 earlier this week, worries
brewed in the market that the rise had come too fast and strong
for the ECB's liking. Fears have intensified after a Financial
Times report confirming those concerns.
ECB policymakers reportedly warned that if the euro keeps
appreciating it will weigh on exports, drag down prices and
intensify pressure for more monetary stimulus.
That followed remarks on Tuesday from ECB chief economist
Philip Lane, who said the exchange rate "does matter" for
monetary policy.
"Overall the comments suggest that an immediate policy
response from the ECB to help weaken the euro appears unlikely,
and they will rely more on jawboning to dampen euro strength for
now," said Lee Hardman, currency analyst at MUFG.
A speech from ECB board member Isabel Schnabel at 1500 GMT
will be closely watched for any comments on the currency.
The euro was last down 0.4% at $1.1806 EUR=EBS , having
slipped earlier in the session to a one-week low of $1.1789.
The dollar was up 0.3% against a basket of currencies at
92.96 =USD .
For about a fortnight now the dollar has been fighting to
hold the line after dropping 10% from a March peak. As traders
start to temper stretched bets on the euro, it could post its
best week on the common currency in four months.
A stronger dollar pushed the British pound down 0.5% to
$1.3287 GBP=D3 and the Norwegian crown down 0.4% to 8.8750
NOK=D3 .
The outlier was the Japanese yen, which stood steady at
106.19 against the dollar JPY=EBS .
Traders were watching for the final August Markit euro zone
composite Purchasing Managers' Index (PMI) at 0800 GMT, which
economists polled by Reuters expect it to be confirmed at 51.6.