FOREX-Euro gains as dollar hobbled by economic worries; yuan jumps

* U.S. dollar nurses losses after jobs data disappoints
* Euro inches higher, focus shifts to upcoming PMI data
* China's yuan hits seven-month high vs dollar
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

By Tommy Wilkes
LONDON, Aug 21 (Reuters) - The euro inched higher on Friday
with the dollar weighed down by concerns over the strength of a
U.S. economic recovery following weaker-than-expected jobs data,
while China's yuan surged to a seven-month high as traders bet
on Chinese growth.
Euro traders are preparing for euro zone manufacturing and
services purchasing managers index (PMI) numbers for August due
at 0800 GMT, which will highlight how the region's economy is
performing as lockdown measures ease.
A larger-than-expected rise in weekly jobless claims in the
United States and warnings from Fed officials about a recovery
in hiring have raised doubts about how quickly the world's
largest economy will bounce back from the coronavirus.
Those concerns, combined with an excess supply of dollars
already in circulation, are likely to weigh on the greenback in
coming weeks, analysts say.
The euro has been the biggest beneficiary - surging from
under $1.12 in early July to above $1.19 this week.
Adam Cole, chief currency strategist at RBC Capital Markets,
noted that euro zone July PMI survey data beat expectations for
a third consecutive month but a slowing pace of recovery was
evident in high-frequency data in Germany.
"At these levels, the euro would be very sensitive to
downside surprises in these data," Cole said.
The single currency was last up 0.1% at $1.1867 EUR=EBS ,
having touched a more than two-year high of $1.1966 earlier this
week.
The dollar index, which measures the greenback against a
basket of rivals, dropped slightly to 92.663 =USD . It is on
course for its ninth consecutive weekly decline.
Republicans and Democrats are struggling to agree on
additional stimulus to boost the economy, in contrast to the
euro zone where investors have welcomed the scale of the
economic packages recently launched.
The standout performer on Friday was China's yuan, which in
offshore markets CNH=EBS briefly hit 6.8935, its strongest
since Jan. 21.
China's currency has recovered all of its losses since the
Chinese city of Wuhan, where the coronavirus initially broke
out, was first put on lockdown, as investors bet on a strong
recovery in the country's economy.
Sterling benefited from broad dollar weakness to move back
up towards $1.3250. It was last up 0.2% at $1.3238 GBP=D3
while it rose marginally versus the euro to 89.65 pence
EURGBP=D3 .
Currency moves elsewhere were contained. The dollar fell
0.2% versus the Japanese yen to 105.59 JPY=EBS .