* Sterling outperforms euro as euro zone economy struggles
* Euro/sterling drops to 1-month low of 80 pence
LONDON Nov 2 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
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
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.