* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
By David Henry and Ritvik Carvalho
NEW YORK/LONDON, Feb 3 (Reuters) - The dollar's rebound slowed on Wednesday with the euro and Japanese yen holding near widely watched levels as foreign exchange markets looked for clues to their next move, possibly from the U.S. jobs report on Friday.
The euro EUR=EBS hung just above a two-month low of $1.20 as the yen JPY=D3 spent a second day around 105.
The broader dollar index =USD was up 0.05% at 91.134 in morning trading in New York after rising to a two-month high of 91.283 during the previous session.
The dollar is up 1.3% this year as investors look to a widening disparity between the strength of the U.S. and European pandemic recoveries.
"The dollar bounce has slowed but may not be over," strategists at Brown Brothers Harriman wrote on Wednesday.
The battle seems be between the U.S. economic growth and vaccination advantages versus the appetite for currency diversification and investment risk that usually works against the dollar, the strategists said.
The euro largely shrugged off news that former European Central Bank chief Mario Draghi had accepted a request to try to form a new Italian government even as European bond and stock markets cheered. were currency markets moved by a U.S. report that hiring by private employers rebounded more than expected in January. The ADP (NASDAQ:ADP) National Employment Report showed private payrolls increased by 174,000 jobs in the month when economists were expecting an additional 49,000. the ADP report has a spotty record predicting the private payrolls count in the U.S. government's employment report because of methodology differences, it is still watched for clues on the labor market's health.
Economists expect the closely watched government report due on Friday to show U.S. nonfarm payrolls increased by 50,000 jobs in January.
The dollar's advances have come despite a rally in equities and improving risk sentiment, defying the currency's historical inverse directional relationship with stocks.
However, many analysts expect that correlation to reassert itself as the year progresses and for the dollar to decline with global growth supported by massive fiscal stimulus and ultra-easy monetary policies which could kindle inflation.
The yen has been steady against the dollar after the greenback benefited from a long and massive bout of short-covering.
"It's been a nice run for the yen in terms of strength, but I think there's maybe some tiring of that move and some retracement," said Bart Wakabayashi, Tokyo branch manager of State Street (NYSE:STT) Bank and Trust.
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Currency bid prices at 9:46AM (1446 GMT) Description
RIC
Last
U.S. Close Pct Change
YTD Pct
High Bid
Low Bid
Previous
Change
Session
Dollar index
=USD
91.1340
91.0960
+0.05%
1.281%
+91.3080
+90.9880 Euro/Dollar
EUR=EBS
$1.2028
$1.2045
-0.14%
-1.56%
+$1.2050
+$1.2005 Dollar/Yen
JPY=D3
104.9900
105.0900
-0.04%
+1.70%
+105.1000 +105.0000 Euro/Yen
EURJPY=
126.27
126.40
-0.10%
-0.51%
+126.5200 +126.1500 Dollar/Swiss
0.8989
0.8975
+0.15%
+1.60%
+0.9000
+0.8971 Sterling/Dollar GBP=D3
$1.3660
$1.3670
-0.07%
-0.01%
+$1.3683
+$1.3620 Dollar/Canadian CAD=D3
1.2792
1.2781
+0.09%
+0.46%
+1.2811
+1.2764 Aussie/Dollar
AUD=D3
$0.7618
$0.7608
+0.14%
-0.96%
+$0.7626
+$0.7602 Euro/Swiss
EURCHF=
1.0810
1.0806
+0.04%
+0.03%
+1.0818
+1.0796 Euro/Sterling
EURGBP=
0.8803
0.8810
-0.08%
-1.50%
+0.8822
+0.8803 NZ
NZD=D3
$0.7200
$0.7192
+0.14%
+0.29%
+$0.7225
+$0.7187 Dollar/Dollar
Dollar/Norway
NOK=D3
8.5950
8.6050
-0.17%
+0.03%
+8.6330
+8.5850 Euro/Norway
EURNOK=
10.3400
10.3600
-0.19%
-1.21%
+10.3775
+10.3327 Dollar/Sweden
8.4117
8.3955
+0.14%
+2.63%
+8.4390
+8.3860 Euro/Sweden
EURSEK=
10.1190
10.1050
+0.14%
+0.42%
+10.1419
+10.1029
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ World FX rates
https://tmsnrt.rs/2RBWI5E
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