* Dollar steadies after selling before U.S. jobs data
* Currencies focus on reaction by stocks, bonds to payrolls
* Franc higher after Swiss reserves reach record high
* Aussie seen as good bet against sterling (Updates prices, adds Australian dollar move)
By Patrick Graham
LONDON, Aug 7 (Reuters) - Major currency markets steadied on Friday, with the dollar stuck in a range it has held since March, after a roller-coaster week for expectations on U.S. and UK interest rates.
The day's main event will be U.S. non-farm payrolls data at 1230 GMT. Traders said a number near the forecast 223,000 jobs ECONUS was likely to encourage bets that rates will rise within months and prod the dollar towards $1.0850 per euro.
The dollar dipped less than 0.1 percent to $1.0935 EUR= against the euro in morning trade in Europe but was steady at 97.791 against a basket of currencies .DXY .
"It's pretty straightforward today - the Fed has said it wants to see improvement in the labour market, which everyone has taken as a couple of hundred thousand jobs each month," said a senior dealer with one international bank in London. "If they get that, the dollar stays bid. If not, it will sell off."
The dollar was still around half a percent higher against the euro and the yen on the week, but that did not affect four months of stagnation, which have undermined expectations it will reach parity against the euro.
The dollar fell short of $1.08 per euro earlier this week, for the third time in as many months. Many now say that most of any tightening of rates over the next year is priced in.
Elsewhere, the Swiss franc fell another 0.2 percent, hitting five-month lows against the euro after data showed Switzerland's foreign currency reserves reached a record high. Growing reserves suggest the Swiss National Bank has been intervening more vigorously against the franc. EURCHF=
Sterling was flat against the dollar and the euro on Friday after the Bank of England's "Super Thursday" of releases. It sold off then on the Bank of England's concern about the strength of the pound.
"For the FX market, perhaps the main point was that the strength of sterling was a real concern for the MPC," said Marshall Gittler, a strategist with online broker IronFX. "It will take some time for people to regain confidence in the pound."
Some traders argued one good bet against the pound for the weeks ahead is the Australian dollar. This week, country's central bank toned down calls for it to weaken.
"I've gone very short sterling and the Aussie is a good way to trade that," said one trader. "The RBA is backing away from rate cuts, and the BoE from rate hikes, and the Aussie has come such a long way against the pound, there is room for some movement the other way."
The Aussie, which has almost halved in value against the pound since 2013, was up half a percent against both sterling AUDGBP= and the U.S. dollar AUD=D4 . (Larry King)