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TOKYO, June 2 (Reuters) The dollar slipped on Friday as growing expectations for the Federal Reserve to raise rates again later this month were undermined by data showing a cooling in the growth of U.S. factory activity.

The Institute for Supply Management's manufacturing index released on Thursday logged its lowest reading since last August, cancelling gains the dollar had made on the fumes of hawkish minutes from the Fed a day earlier.

''Expectations for interest rate rises have been strengthening and the market tried to be bullish in the dollar, but it didn't have enough clues to break through 113.50 yen or 1.27 (per euro),'' said the chief trader at a European investment bank in Tokyo.

''The market is reacting a bit to every number coming out, but the basic view hasn't changed yet'' that the dollar is stuck in ranges, he said.

The U.S. currency's rise on Thursday was also deflated by a warning from the European Central Bank in its twice-yearly Financial Stability review that any unravelling of global imbalances could trigger ''significant downward pressure'' on the dollar.

The comments came amid rising speculation that global policy-makers are content to see a weaker dollar to help ease the imbalance between the huge U.S. trade deficit and surpluses in Asia.

In early Tokyo trade, the dollar slipped to 112.55 yen from 112.70 in late U.S. trade on Thursday, when it rose as high as around 113.40.

The euro edged up to $1.2815 off the previous session's low around $1.2720.

The single European currency was little changed at 144.25 yen For further clues about the Fed's stance on rates the market was looking to the U.S. nonfarm payrolls report due later in the day, which will give an update on the strength of the U.S. labour market.

The Fed has raised rates 16 times in a row since mid-2004, to 5 percent.

REUTERS PDS VP0715