FOREX-Euro consolidates gains following lift from extra ECB stimulus

* Safe-haven currencies soft on economic recovery hopes

* U.S. jobless rate expected to soar near 20%

* Graphic: World FX rates in 2020

LONDON, June 5 (Reuters) - The euro consolidated its gains on Friday after receiving a boost from the European Central Bank’s announcement a day earlier that it was expanding its stimulus programme, putting the single currency on course to rise for a third straight week.

The euro rose to $1.1384 against a weakening dollar, its highest level since March 10, but then slipped back to 1.1310, down just 0.06% on the day.

It remains on course for a weekly jump of 2.5% although it may not log a ninth straight day of gains, which would be its longest rising streak since October 2004.

The dollar index staged a limited comeback, rising 0.08% to 96.84 after earlier losses but is still set for its third consecutive week of losses and remains near its lowest in nearly three months.

Sentiment towards the euro was upbeat in early trading.

“The euro will keep rallying and move towards $1.20,” Peter Chatwell, head of rates at Mizuho Bank, said, adding that the ECB had “dramatically” supported the euro by reducing tail risk.

The ECB increased its emergency bond purchase scheme to 1.35 trillion euros and extended it to mid-2021.

“The rotation out of U.S. dollar generally continued unabated overnight,” said Jeffrey Halley, an analyst at OANDA.

Support for the euro was bolstered on Wednesday when Germany launched a 130 billion euro stimulus package after last month supporting a European Union recovery fund that would bring the bloc closer to a fiscal union.

Commerzbank analysts noted that the recent rise of the euro brought a risk of a correction and that the approval of the EU recovery fund would be key to keep the currency higher.

“Anyone who knows European politics is aware of the fact that an agreement on the recovery fund is likely to be difficult, will take a long time and that an agreement is only likely to be reached late at night and at the very last minute”, they warned.

“Until then the current EUR optimism will therefore be put to the test”, they added.

Against the Swiss franc the euro hit a fresh five-month high of 1.0875 then retreated slightly to 1.0848.

Recent moves away from so-called safe-haven currencies reflected broad optimism in financial markets as easing coronavirus lockdown restrictions supported economic recovery hopes.

The Australian dollar, often seen as a risk proxy in the currency market, rose 0.3% to $0.6968, briefly moving earlier above $0.70 for the first time since early January.

“You’ve got the creeping optimism of the global economy being past the worst and thinking that things are going to be up from here,” Commonwealth Bank of Australia analyst Joe Capurso, said, adding this supported “commodity currencies like the Aussie and like the Kiwi”.

In the United States, official employment data due later in the day is expected to show non-farm payrolls fell by 8 million in May, after a record 20.537 million plunge in April.

The U.S. unemployment rate is forecast to hit 19.8%, a post-World War Two record, from 14.7% in April. (Reporting by Julien Ponthus; Additional reporting by Abhinav Ramnarayan and Tom Westbrook; Editing by Hugh Lawson)