FOREX-Dollar recovering as jobs shock fades; Aussie jumps on RBA

* Dollar bounces off post-payrolls troughs, euro below $ 1.10

* Aussie jumps over 1 pct after RBA keep rates flat

By Hideyuki Sano and Ian Chua

TOKYO/SYDNEY, April 7 (Reuters) – The dollar held firm in Asia on Tuesday, having recovered almost all of its payroll-inspired losses while the Australian dollar jumped more than one percent after the Australian central bank refrained from cutting rates.

The dollar index stood at 97.040, recovering from Monday’s low of 96.329, with the dent from surprisingly soft U.S. payroll data announced on Friday proving to be temporary.

“The market is coming to think that you cannot downgrade your view on the U.S. jobs market just by looking at one soft number. Wages also weren’t bad,” said Kyosuke Suzuki, director of forex at Societe Generale in Tokyo.

The euro last stood at $ 1.0931, recoiling from Monday’s $ 1.1036 peak. The euro has repeatedly failed to hold above $ 1.10 in the past few weeks, suggesting there is plenty of selling interest above that level.

Against the yen, the greenback stood at 119.55, off a low of 118.71 set on Friday after the disappointing job growth figures sent dollar bulls packing.

An industry report on the U.S. services sector also showed on Monday encouraging strength in exports and employment in March, holding out hope that the economy can quickly recover from the first-quarter slowdown.

“The USD appears to be regaining composure in the aftermath of last week’s soft jobs data with some help from U.S. yields, which rebounded from Friday’s lows,” analysts at BNP Paribas wrote in a note to clients.

“That said, the full market impact is likely to transpire once European markets return on Tuesday.”

Traders also noted that trading volume has been low with many financial centres around the world closed from Friday for the Easter holidays. European markets reopen later on Tuesday.

While the dollar recovered from lows, its upside also looked limited as investors see dwindling chance of a rate hike by the Federal Reserve in June.

A top Federal Reserve official said the timing of the first interest rate hike in nearly a decade is unclear.

New York Fed President William Dudley said for now policymakers must watch that the U.S. economy’s recent weakness does not signal a more substantial slowdown.

The biggest mover in Asia was the Australian dollar, which jumped after the Reserve Bank of Australia held its rates steady in a surprise move to some traders who had looked for a cut.

The Aussie rose to as high as $ 0.7700, its highest in two weeks, from around $ 0.76 before the RBA decision, extending its recovery from a six-year trough of $ 0.7534 set on Thursday.

A relentless fall in iron ore prices, Australia’s single biggest export earner, and a currency that is still seen to be above fair value had left many convinced that the RBA would ease either this month or next.

(Editing by Kim Coghill)