European stocks higher before US jobs data

European stock markets rose Friday, outperforming Asian equities, as traders geared up for key US jobs data for fresh indications on the state of the global economy.

From London, to Frankfurt, Paris, Madrid and Milan, stock markets were rising.

But growing fears that global economic turmoil is seeping into the United States kept pressure on the dollar, as investors bet that the Federal Reserve would postpone hiking interest rates further this year.

"It's been a quiet but positive start for European markets with large swathes of Asia headed for Lunar New Year celebrations ahead of the latest US unemployment report for January," noted analyst Jasper Lawler at traders CMC Markets.

"The lead up to the non-farm payrolls report has seen the dollar nosedive in what could be its worst weekly decline since 2011."

After a tumultuous start to the year fuelled by a slowdown from Asia to South America, the focus has turned to the US, the world's biggest economy and key driver of world growth.

The US has enjoyed reasonable results for the past few years in the face of a worldwide malaise, but a string of weak data out of Washington recently has led to speculation it is now in the firing line.

On Thursday, figures showed orders for manufactured goods fell again in December and jobless claims rose last week. That came after data pointed to a slowdown in factory activity, easing economic growth, a drop in consumer spending and weakness in the crucial services sector.

Eyes are firmly on the release later in the day of a jobs report with a weak reading likely to reinforce worries about the economy and possibly force the Fed to keep borrowing costs on hold.

"Expectations are growing by the day that the Fed will not hike again this year given the weaker growth picture and tightening financial conditions," Jason Wong, a currency strategist in Wellington at Bank of New Zealand Ltd., said in an email to clients. "The key release is US employment data."

With a rate hike looking less likely, the dollar has taken a hit this week, sinking well below 117 yen, from above 121 yen at the end of last week when the Bank of Japan said it would adopt a negative interest rate policy.

The euro has also rallied against the US unit, while the weakened greenback has provided some support to oil prices as it makes the commodity cheaper for buyers not using dollars to make transactions.

London - FTSE 100: UP 0.5 percent at 5,929.1

Frankfurt - DAX 30: UP 0.3 percent at 9,418.9

Paris - CAC 40: UP 0.6 percent at 4,255.3

EURO STOXX 50: UP 0.6 percent at 2,922.1

Tokyo - Nikkei 225: DOWN 1.3 percent at 16,819.59 (close)

New York - Dow: UP 0.5 percent at 16,416.58 (close)

Euro/dollar: DOWN at $1.1194 from $1.1215 on Thursday

Dollar/yen: UP at 116.91 yen from 116.74 yen