FOREX-Euro holds gains after ECB relief rally, U.S. jobs data eyed

* Euro holds near 2-month peaks against dollar

* Dollar firm versus yen, Ukraine wariness seen capping gains

* Expectations for U.S. jobs lowered by soft ADP, ISM reports

By Shinichi Saoshiro

TOKYO, March 7 (Reuters) - The euro hovered near a two-month high against the dollar early on Friday following a relief rally when the European Central Bank left its interest rates unchanged.

Caution ahead of the closely-watched U.S. nonfarm payrolls later in the day was seen capping further gains.

The ECB left interest rates unchanged on Thursday and ECB President Mario Draghi told a news conference that economic conditions in the region did not require a shift in monetary policy. News Search ID:nECBNEWS

The euro stood at $1.3860 EUR= , within a stone's throw of a two-month peak of $1.3873 hit on Thursday just after the ECB decision.

The single currency fetched 142.87 yen EURJPY= after brushing a two-month high of 142.99 yen earlier on Friday.

Friday's nonfarm payrolls report, due at 1330 GMT, is likely to show job growth in the United States picked up enough in February to encourage the Federal Reserve to continue scaling back its monetary stimulus. News Search ID:nL1N0M01H4

A Reuters poll of economists found employers were expected to have added 150,000 workers to their payrolls last month.

But market watchers said expectations may have been lowered following the soft ADP private sector jobs report and ISM services sector survey released earlier this week.

"The market could treat the consensus figure of 150,000 jobs as a positive surprise. Considering the severe winter conditions, a number through to 120,000 may not be considered a letdown," said Ayako Sera, senior market economist at Sumitomo Mitsui Trust in Tokyo.

The dollar fetched 103.100 yen JPY= , having broken above the 103 yen threshold on Thursday for the first time since late January and pulling away from this week's low of 101.20 yen hit on Monday.

A solid U.S. nonfarm payrolls report would help the greenback consolidate its position above 103 yen but participants will be wary of pushing too far as the crisis in Ukraine appears far from over, Sera at Sumitomo Mitsui Trust said.

The yen, along with the Swiss franc, is considered a safe haven currency and received a major boost earlier this week when tensions in the Crimea heightened.

The dollar index .DXY , which weighs the dollar against a basket of major currencies, stood at 79.663 after falling to a 2014 low of 79.59 on Thursday on the euro's post-ECB surge.

The Australian dollar was at $0.9108 , not far from a three-month high of $0.9114 reached Thursday after upbeat retail sales and trade data supported a steady interest rate outlook.

(Editing by Eric Meijer)

((shinichi.saoshiro@thomsonreuters.com)(Reuters Messaging: shinichi.saoshiro.reuters.com@reuters.net))

Keywords: MARKETS FOREX/