FOREX-Dented by jobs miss, dollar teeters ahead of CPI

    * Euro approaches $1.22 as dollar bounce fades
    * Dollar/yen back below 110; dollar/yuan back below 6.4
    * Thursday brings U.S. CPI, ECB
    * Graphic: World FX rates

    By Tom Westbrook
    SINGAPORE, June 7 (Reuters) - The U.S. dollar began the week
under gentle pressure, after a second consecutive month of
softer-than-expected U.S. jobs data reversed its recent attempts
at a rally, as focus shifted to inflation figures and a European
Central Bank meeting.
    Friday jobs readout, which showed U.S. non-farm payrolls
increasing by 559,000 in May, missed market expectations by
nearly 90,000 and seemed to cool worries that the recovery was
running hot enough to require early tapering of policy support.
    After the data, the dollar unwound a broad bounce, and on
Monday it opened in Asia near where it finished the week. A euro
bought $1.2165, about 0.5% below the three-week high
of $1.2104 it had struck on Friday.
    The Australian and New Zealand dollars were back above 77
cents and 72 cents, respectively, and the dollar was back
beneath 110 Japanese yen, last trading at 109.61 yen.

    China's yuan bounced back to again trade stronger than 6.4
per dollar and last bought 6.3880 offshore.
    "Friday's slightly softer-than-expected U.S. May employment
numbers stand to set the tone for the weeks ahead," ING Bank
analysts said in a note to clients.
    "This provides the excuse for the (U.S. Federal Reserve) to
say that substantial progress towards its goals has not been
achieved and to defer the tapering debate a little longer."
    Short bets against the dollar increased a tiny bit last week
as Fed officials insist the recovery has a long way to run and
they will not rush to react to short-term data points.
   Still, U.S. inflation figures due on Thursday will be a major
focus for traders looking to glean an insight into just how
short-term growing price pressures may be. Another miss of lofty
forecasts might clear the way for further dollar declines.    
    "Assuming dollar bears can pass through Super Thursday of
U.S. CPI and the ECB policy decision unscathed, the dollar could
stay gently offered into the major event risk of the month which
is the FOMC decision," ING analysts added in their note.
    The U.S. dollar index, which measures the greenback
against a basket of six major currencies, was steady at 90.107
in Asia, in the top half of a narrow range it has kept for
several weeks.
    Also this week is Chinese trade balance data, which could
give a reading on the fundamental forces behind the yuan's rapid
rise, while the market's focus for the ECB is on whether the
bank adjusts the pace of its bond buying programme.
    "The ECB is in a bit of a Catch-22," said Rabobank's macro
strategists in a client note. "The outlook is gradually
improving and the financial conditions are also still broadly
conducive to the recovery," they said.
    However, this is partly due to resolute dovishness from
several members, setting the stage for debate inside this week's
meeting which may deliver a small slowdown in the pace of bond
buying, Rabobank added. 
    Currency bid prices at 0044 GMT
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
 Euro/Dollar                  $1.2169        $1.2167     +0.02%         -0.39%      +1.2173     +1.2163
 Dollar/Yen                   109.5400       109.5100    +0.00%         +6.02%      +109.6300   +0.0000
 Euro/Yen         <EURJPY=EB  133.30         133.26      +0.03%         +5.03%      +133.3800   +133.2200
 Dollar/Swiss                 0.8990         0.8991      -0.01%         +1.62%      +0.8994     +0.8989
 Sterling/Dollar              1.4167         1.4164      +0.03%         +3.70%      +1.4169     +1.4157
 Dollar/Canadian              1.2077         1.2074      +0.02%         -5.16%      +1.2080     +1.2074
 Aussie/Dollar                0.7742         0.7742      +0.01%         +0.65%      +0.7748     +0.7738
 NZ                           0.7208         0.7212      -0.04%         +0.38%      +0.7213     +0.7207
 Dollar/Dollar All spots
Tokyo spots
Europe spots 
Tokyo Forex market info from BOJ 

 (Reporting by Tom Westbrook; Editing by Lincoln Feast.)