Dollar hovers near highs after US jobs data

TOKYO, June 4 (Reuters) The dollar stayed near an eight-week high against the euro and a four-month high versus the yen on Monday after a strong U.S. employment report further trimmed expectations for a Federal Reserve interest rate cut this year.

A round of dollar buying started late last week after data showing gains of a more-than-forecast 157,000 jobs in May, as well as a rise in the Institute for Supply Management's May manufacturing index to the highest level since April 2006.

These reports offset a tepid U.S. core inflation number for April.

''Dollar buying is likely to continue, supported by economic data released on Friday although some of it was not necessarily dollar-supportive,'' said a trader at a Japanese trust bank.

The euro was at $1.3445 on Monday, mostly flat from U.S. trade on Friday. The pair remained within a sight of an eight-week low of $1.3392 hit on the electronic trading platform on EBS late last week.

The dollar fell to 121.95 yen from around 122.10, but staying near a four-month high of 122.14 yen hit on Friday. Traders eye 122.20 yen, a 4-1/2-year high struck in January.

The euro edged down to 164.00 yen from 164.15 yen. The single currency struck an all-time high of 164.29 yen last week.

As a raft of U.S. data has passed, the market shifted its focus to a series of central bank policy meetings later this week.

The European Central Bank is widely expected to lift interest rates to 4 percent from current 3.75 percent on Wednesday.

Traders said the market has factored in the rate rise and market players would look to comments from ECB President Jean-Claude Trichet for clues about further rate tightening in the future.

Central banks in Britain, Australia and New Zealand will make rate announcements later this week.

REUTERS PDS BST0738