* Euro up vs US dollar as hawkish ECB meets dovish Fed
* Dollar at more than 6-mo high vs yen
* Investors clamor for carry trade on yield differentials (Adds quotes, updates prices)
By Julie Haviv
NEW YORK, April 1 (Reuters) - The U.S. dollar slipped against the euro on Friday, with more losses likely over the near-term given expectations that the European Central Bank will soon tighten monetary policy, while the Federal Reserve remains on hold.
Despite a good March U.S. employment report, New York Federal Reserve president William Dudley said the Fed was "still very far away from achieving" its dual mandate of maximum sustainable employment and price stability.
"Dudley is taking a much more cautious view than the Fed hawks that have been speaking over the last 24 hours, and that's helped the euro," said Brian Dolan, chief strategist at Forex.com in Bedminster, New Jersey. "The hawks are known quantities but Dudley is among the three policymakers at the core of the FOMC."
Dudley's comments were interpreted to mean there is no reason for the U.S. central bank to reverse course any time soon, causing U.S. Treasuries prices to erase losses incurred after the earlier by jobs report. For details, double-click on [ID:nOAT004775]
The ECB is widely expected to be the first central bank to raise rates at its policy meeting next Thursday.
The euro was around $1.4197
DOLLAR, EURO JUMP VERSUS YEN
The U.S. dollar hit its highest level in more than six months against the yen and was on pace to show its strongest weekly gains since December 2009 as yield differentials favor the greenback.
Prior to the New York session, the dollar/yen
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The euro
The Bank of Japan is widely expected to lag behind the Federal Reserve and the European Central Bank in raising interest rates, especially in the wake of the March 11 earthquake and tsunami.
Against a basket of currencies, the dollar <.DXY> was up 0.2 percent at 76.972.
An improving U.S. economy bolsters the argument for tighter monetary policy and should further widen dollar/yen yield differentials. Investors are increasingly looking to sell the yen and buy high-yielding currencies, called carry trades. (Additional reporting by Nicholas Olivari, Steven C. Johnson and Gertrude Chavez-Dreyfuss in New York and Anirban Nag in London; Editing by Kenneth Barry)