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SYDNEY, May 5 (Reuters) The U.S. dollar was languishing near multiple lows in early trade on Friday, having hit a one-year trough on the euro after the European Central Bank reaffirmed market expectations for a June rate hike.

The euro was sitting at $1.2697, having hit a high of $1.2723 in New York on Thursday after ECB President Jean-Claude Trichet emphasised the central bank's vigilance on inflation.

Traders saw an outside chance of a dollar bounce should U.S. payrolls figures later on Friday handily beat forecasts of a 200,000 employment rise and a 4.7 percent jobless rate.

Still, dealers noted that U.S. data had been pretty strong all week and the dollar had still fallen across the board.

In contrast, it took only the slightest hint of a pick-up in Europe for the market to buy the euro, sterling and the Swiss franc, suggesting investors had decided the sell the dollar no matter what.

''One has to question whether the market will react to anything other than a dollar-negative number,'' said Alan Ruskin, chief international strategist at RBS Greenwich Capital.

''After all, the dollar has all but ignored very positive U.S. real economy numbers for the past fortnight, in notable contrast to the bond market.'' He also noted that speculative dollar sellers would typically chose to square or trim short positions ahead of a big number like payrolls, but not on this occasion.

''This is another strong signal of the market's willingness to ignore potentially positive dollar events. Ever since G7, the dollar has traded as if there is a solid long-term euro/dollar bid in place,'' said Ruskin.

Last weekend, the G7 called for more flexibility in exchange rates, which investors generally took to mean a fall in the dollar. Various officials had since said the market misunderstood, but to little effect.

The dollar was stuck at 1.2279 Swiss francs, near an eight-month low of 1.2250 francs struck on Thursday.

Sterling also hit a new 12-month high at $1.8549, before pulling back slightly in Asia to $1.8515.

Against the Japanese yen, the dollar was last at 113.49 yen, after finishing at 113.61 in New York. The absence of Japanese investors for holidays this week has kept dollar/yen in a 112.90 to 114.17 range, though the technical trend was clearly bearish.

Reuters VJ VP0515