FOREX-Dollar up vs euro, down vs yen on weak US jobs data

* Dollar rises vs euro, falls vs yen after jobs data * ECB holds key rate at record low 1.0 percent as expected * New orders for U.S. manufactured goods rise in May * China quells FX reserves speculation, supports dollar (Adds analysts' comments, detail about U.S. jobless rate and more on China official's remarks)

By Vivianne Rodrigues

NEW YORK, July 2 (Reuters) - The dollar rose versus the euro and fell against the yen on Thursday as a report showing a larger-than-expected drop in U.S. non-farm payrolls in June, renewed concerns about the economic recovery's pace.

U.S. Treasury bonds rose and U.S. stocks fell as the data raised risk aversion, enhancing the dollar's safe-haven appeal.

Analysts said demand for the euro also fell after European Central Bank President Jean-Claude Trichet said euro-zone activity would likely remain weak for the rest of the year.

The ECB left its benchmark refinancing interest rate at a record low of 1 percent, as expected. Trichet said stabilization in 2010 would be followed by a recovery. For details, see [ID:nL2512532].

"The weak jobs report reinforced a trend already in place in the forex market prior to the release, that is, that the dollar was oversold," said Camilla Sutton, a currency strategist at Scotia Capital, in Toronto.

"Euro/dollar has been stuck in a range and with weak data like today's, the euro will not get the support to break through $1.42," she added.

In late morning trading in New York, the euro was down 1 percent at $1.3998 EUR=, retreating from $1.4201 hit on Wednesday, its highest since early June. The dollar slipped 0.6 percent to 95.99 yen JPY=EBS, after trading as high as 96.89 yen before the jobs report.