(Reuters) - The euro stayed close to a five-week low against the dollar on Friday after sharp falls the previous day and as markets await U.S. jobs data, where a strong number could lessen the chances of the Federal Reserve opting for more quantitative easing. A day after the European Central Bank cut interest rates, further dampening the euro's appeal, and China and the Bank of England also announced more monetary easing, analysts said signs of improvement in the U.S. economy would bolster demand for the dollar. "If non-farm payrolls are strong enough to suggest there will be no QE (quantitative easing) from the Fed, the dollar will strengthen. If they are weaker then the dollar will fall as the Fed will just be playing catch-up with the rest of the world," said ING head of currency strategy Chris Turner. The data is due at 1230 GMT. The U.S. economy is expected to have added 90,000 new jobs last month, compared with 69,000 in May, though some analysts said this week's strong private payrolls data suggest the reading could be better than this. Goldman Sachs raised its forecast to a 125,000 gain from 75,000 previously. The euro was down 0.1 percent at $1.2375, near a 5-week low of $1.23638 hit on Thursday. A break below there would leave it on course for a move towards the two-year low of $1.2288 struck on June 1. The dollar index, which measures the dollar's value against a basket of currencies, was up 0.1 percent at 82.872 .DXY. It rallied to 82.930 on Thursday on the back of euro weakness, a high not seen since early June. "Politically and economically, it is not the environment for the euro to rally ... In a week or a month's time, it can easily get back down towards below $1.2280 and maybe even head towards $1.20," Kathleen Brooks, research director at FOREX.com said. She added that even if the U.S. jobs data was weak, the U.S. Fed may still not choose to adopt more quantitative easing, adding there were questions over the effectiveness of QE in boosting the economy. Against the yen, the dollar was barely changed at 79.84 yen having reached a two-week high of 80.099 on Thursday. Traders reported sell orders around 80.10 which may cap gains. MORE EURO WEAKNESS The ECB cut its main interest rate to 0.75 percent and the deposit rate to zero, reducing the incentive for investors to hold a currency already beset by debt problems. Many analysts say the ECB's easing this week will lead the euro to take on the role of a funding currency - used to finance investments in higher-yielding assets - meaning it could struggle to make ground even when share prices rise. "A weaker euro has to be one of the least costly solutions to the euro zone crisis," ING's Turner said, adding he expected the euro to see an "orderly decline" towards $1.15 by year-end. A Reuters poll conducted after the ECB rate cut showed economists expect more measures from the central bank in the coming months, possibly including another round of cheap, long-term loans for banks. The euro also stayed near record lows hit on Thursday versus the Australian and New Zealand dollars. Against the Swiss franc, the euro was at 1.2007 francs, continuing to hover just above the 1.20 floor for the euro/Swiss franc rate imposed by the Swiss National Bank last year in an attempt to keep its economy competitive. Many in the market believe the SNB will struggle to maintain the cap, with data on Friday showing the SNB's foreign exchange reserves jumped 19 percent in June as the euro zone crisis forced it to intervene heavily. The higher-yielding Australian dollar was down 0.2 percent against the U.S. dollar at $1.0262, off a two-month high of $1.0330 hit on Thursday following a surprise interest rate cut in China, Australia's single largest export market.

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