* Dollar index at 3-month high on rising Dec Fed rate hike hopes
* Euro hovers above major support from double bottom
* Sterling at 3-week low after BoE dampens rate hike expectations
By Hideyuki Sano
TOKYO, Nov 6 (Reuters) - The dollar held firm on Friday with investors on tenterhooks to see whether upcoming U.S. job data will be strong enough to cement rising expectations of a Federal Reserve interest rate hike next month.
The dollar index .DXY on Thursday rose to a three-month high of 98.135 .DXY =USD , edging near its August peak of 98.334. It last stood at 97.963.
"Fed policymakers appear to be trying to keep the possibility of a December rate hike alive since their last policy meeting," said Shinichiro Kadota, chief Japan forex strategist at Barclays (L:BARC).
Fed Chair Janet Yellen said on Wednesday that "liftoff" in interest rates in December was a live possibility, leading investors to think a rate hike will come next month unless economic indicators drastically weaken in coming weeks. urn:newsml:reuters.com:*:nL1N12Z20G
"There have been comments from Fed officials that appear to be attempting to lower the hurdle on the payroll increase. If payrolls increase about 170,000-180,000 as markets expect, rate hike expectations will heighten further," Barclays' Kadota said.
The median forecast for October nonfarm payrolls in a Reuters poll of economists is an increase of 180,000, above slightly sluggish job growth of 142,000 in September. The data is due at 1330 GMT.
The euro, which has been under pressure since the European Central Bank late last month signalled additional easing, slipped to as low as $1.0834 EUR= , its lowest level since late July, on Thursday.
The common currency last stood at $1.0883, hovering not far from a major support around $1.0810-20, a double bottom chart pattern hit earlier this year, a break of which could open the way for a test of its April low of $1.05205.
The dollar hit a 2 1/2-month high of 122.01 yen JPY= on Thursday and last stood at 121.71 yen.
Closing above resistance at 121.75, would signal a break above its trading range in the past few months and could lead to a test of resistance around 123, George Davis, chief technical analyst at RBC Dominion Securities in Toronto, said in report.
The British pound GBP=D4 fell 1.2 percent on Thursday, its biggest drop since late August, after the Bank of England's governor dismissed the view it would raise interest rates shortly after the Fed.
The Bank of England gave no sign on Thursday it was in a hurry to raise interest rates, predicting that inflation, now near zero, would pick up only slowly even if rates stay on hold all next year, and highlighting the increase in external risks to the UK economy over the past three months. urn:newsml:reuters.com:*:nL8N12Z2U4
The pound stood at $1.5207 GBP=D4 , near a three-week low of $1.5205 touched on Thursday. (Editing by Eric Meijer)