FOREX-Dollar pressured before payrolls data, poised for worst weekly performance for 2019

* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

By Daniel Leussink
TOKYO, June 7 (Reuters) - The dollar was under pressure on
Friday and was poised for its worst weekly performance for the
year, as investors waited on a key U.S. jobs report that is
expected to back expectations for a near-term Federal Reserve
rate cut to support a slowing economy.
Not helping the U.S. currency was the European Central
Bank's policy review on Thursday where it refrained from hinting
at an interest rate cut and instead pushed back the timing of
its first rake hike since the 2008 financial crisis.
Market participants' immediate focus was on the U.S.
non-farm payrolls data for May due later on Friday, and early
signs weren't good with hiring expected to have dropped in a
boost to rate doves and dollar bears.
A slowdown in the U.S. labour market was evident in a
worse-than-expected ADP National Employment Report released on
Wednesday, which showed private U.S. employers added 27,000 jobs
in May, the smallest monthly gain in more than nine
years. "The ADP report was unexpected so it's hard to know what to
expect" from the U.S. jobs data, said Yukio Ishizuki, senior
currency strategist at Daiwa Securities.
The dollar has been hit in recent weeks by the rising
expectations for a U.S. rate cut before year-end, as an
escalating China-U.S. trade row hurts business confidence and
growth. Recent comments from Fed officials have also pointed to
an easing in coming months.
Markets have priced in slightly more than a 50% probability
rates will be cut 25 basis points by the end of July and one
more cut would follow by the end of the year, according to the
CME Group's FedWatch Tool.
Against a basket of six peers, the dollar was a shade lower
at 97.029 .DXY , trading about 0.3% above an eight-week low of
96.749 brushed on Wednesday.
The index was on course for a 0.75% loss this week, its
worst weekly performance since early December last year.
The euro EUR= jumped half a percent during the previous
session as markets had positioned on a more dovish signal from
the ECB and an acknowledgement of weak economic growth in the
bloc. The single currency was steady at $1.1275 and was set for a
weekly gain of nearly 1%, its best weekly performance against
the dollar since late September last year, when it rose nearly
1.1%.
"I think the ECB policy was quite dovish as the forward
guidance was prolonged, but the market was hoping the bank would
be even more dovish," said Daiwa's Ishizuki.
Elsewhere in the currency market, the dollar was 0.05%
higher at 108.455 yen JPY= .
Market participants were also keeping tabs on developments
around Washington's trade negotiations with both China and
Mexico.
U.S. President Donald Trump said on Thursday he would decide
whether to carry out his threat to hit China with tariffs on at
least $300 billion in the country's goods after a G20 meeting
late this month. (Editing by Shri Navaratnam)