* Sterling outperforms euro as euro zone economy struggles
* Euro/sterling drops to 1-month low of 80 pence
LONDON Nov 2 (Reuters) - Sterling rose to a one-month high against the euro on Friday, with investors viewing the UK relatively optimistically as the euro zone economy faces a sharp downturn.
But sterling slipped against a broadly stronger dollar before a crucial U.S. jobs report that could bolster expectations of a recovery in the world's biggest economy.
Construction activity data due at 0930 GMT would provide clues to how resilient the UK has been at the start of the fourth quarter and if the Bank of England will hold off from pumping in more money to stimulate the economy.
The euro was down 0.3 percent at 80 pence, its lowest level since October 3. Data showed euro zone manufacturing shrank for the 15th month running in October as output and new orders fell.
The pound fell 0.2 percent against the dollar to $1.6090. Near-term support is seen at its 55-day moving average of $1.6035.
Payrolls data and the unemployment rate figures for the U.S. due at 1230 GMT, will be the decisive factor for sterling/dollar. Better-than-expected data could boost risk appetite and sterling while a disappointing number could hurt the pound and the euro.
"The dollar tends to weaken if we see better data and there is a chance we could see some euro weakness after the data," said Peter Kinsella, currency strategist at Commerzbank.
Recent data out of the UK has been upbeat and helped support sterling by lowering the chances of the BoE announcing further monetary stimulus in its meeting next week.
Comments from BoE deputy governor Charlie Bean on Wednesday chimed with a recent lowering of expectations that the central bank will opt for more quantitative easing (QE) next week, providing support for the pound.
Trending On Reuters
Prime Minister Narendra Modi will let executive order making it easier for businesses to buy land lapse on Monday after failing to win support from opposition parties in a major blow to his economic reform agenda. Full Article