* Dollar recovers, China quells FX reserves speculation
* Markets await ECB rate announcement at 1145 GMT
* U.S. payrolls due at 1230 GMT
(Updates comments, prices, adds detail; previous TOKYO)
By Naomi Tajitsu
LONDON, July 2 (Reuters) - The dollar rose on Thursday, recovering after a Chinese Foreign Ministry official quelled some speculation about currency reserves diversification, while traders awaited an European Central Bank policy announcement and key U.S. jobs data later in the day.
Chinese Vice Foreign Minister He Yafei on Thursday said he had not heard that Beijing had requested a discussion on reserve currencies at an upcoming Group of Eight summit in Italy
His comments sparked a recovery in the dollar, which fell broadly on Wednesday after G8 sources told Reuters that China had asked for a debate on proposals for a new global reserve currency,.
Analysts said his statement helped to soothe recent jitters that countries may be considering a possible shift away from dollars in their currency reserve portfolios -- which could potentially sting the U.S. currency. Should it materialise, such a process would be long-term, they argued.
"The dollar is recovering as China has said that it didn't know about the reserve currency issue and the G8," said Lutz Karpowitz, currency analyst at Commerzbank in Frankfurt.
"Talk of reserves diversification should start to have a more limited impact on the market."
Traders awaited an ECB rate announcement at 1145 GMT, when the central bank is widely expected to hold rates at a record low 1.0 percent.
President Jean-Claude Trichet will speak to reporters at 1230 GMT, and investors will scrutinise his comments for details on the ECB's asset buying plans.
Analysts said the day's main event would be U.S. non-farm payrolls also due at 1230 GMT, which were expected to offer more insight into whether the U.S. employment situation is starting to stabilise after massive job losses in past months.
By 0818 GMT, the euro had slipped 0.4 percent to $1.4100, retreating from $1.4202 hit on Wednesday, its highest since early June.
The dollar index rose 0.4 percent to 79.983, supported as a 1.4 percent slide in European shares kept traders averse to risk, which prompted some safe-haven demand for the U.S. currency.
The dollar was little changed at 96.66 yen, which rose broadly on risk aversion.
US JOBS AWAITED
The Swedish crown fell after Sweden's central bank surprised market participants by cutting its key repo rate to 0.25 percent from 0.5 percent on Thursday. The euro rose roughly 1 percent on the day to 10.8258 crowns.
The Swiss franc slipped after a Swiss National Bank official said the central bank was prepared to continue currency interventions to stem strength in the domestic currency.
The euro rallied to the day's high of 1.5245 Swiss francs, from just below 1.52 francs before the comments.
The U.S. economy is expected to have shed 363,000 jobs in June, more than 345,000 lost in May, and the unemployment rate is forecast to have risen to 9.6 percent from May's 9.4 percent.
The data comes on a Thursday rather than the usual Friday because the Independence Day holiday is being observed on July 3.
U.S. private employers slashed a bigger-than-expected 473,000 jobs in June, according to a report from ADP Employers Services on Wednesday, making the market wary that the government's data may show more lost jobs than forecast.
(Reporting by Naomi Tajitsu; Editing by Toby Chopra)