* Dollar hits week-high on euro and yen ahead of payrolls
* Data due 1230 GMT, consensus for +870k jobs
* Kiwi heads for weekly jump as rate hikes draw near
SINGAPORE, Aug 6 (Reuters) - The dollar crept higher on Friday in the lead up to the release of U.S. employment data, as traders expect strong numbers that could make the case for faster U.S. policy tightening at a time when action in Europe or Japan seems long distant.
The euro, which has failed in recent attempts to breach resistance around $1.1910, drifted down to a one-week low of $1.1818 in Asia, just below its 20-day moving average.
The dollar also touched a one-week high of 109.88 Japanese yen, adding to a solid bounce from a low of 108.72 that it hit on Wednesday.
Federal Reserve Vice Chair Richard Clarida laid the groundwork for dollar gains by suggesting this week conditions for hiking interest rates might be met as soon as late 2022.
Employment is the area of particular focus because it has remained patchy while other indicators have recovered, something that a few months of sustained hiring could quickly change.
U.S non-farm payrolls data is due at 1230 GMT.
"This (jobs) number and the next one are going to be quite key to the Fed's decision," said Shafali Sachdev, head of foreign exchange in Asia at BNP Paribas Wealth Management.
"While the risks are on the upside I would say that the market is positioned for a good number, and so if it doesn't pan through we could see it expressed in some disappointment and some dollar selling," she said.
Forecasts for jobs created last month vary widely, from about 350,000 to 1.6 million, but the consensus figure is 870,000 and traders think a number that size or larger would lift the dollar while something below 650,000 might hurt it.
The Australian and New Zealand dollars dipped marginally in the Asia session, but the kiwi is on course for its best week since late June following a sharp drop in unemployment that has investors all but sure interest rates will rise this month.
The New Zealand dollar last bought $0.7048 and the Australian dollar bought $0.7387.
DOLLAR ADRIFT
Traders are placing so much store in the looming jobs figure because factors driving currencies are in flux, and the concerns about inflation and negative real yields that had weighed on the U.S. dollar are giving way to a focus on the rates outlook.
A Reuters poll of strategists found most think the dollar will fall over the next year, but more than 60% of respondents also said they weren't particularly sure about it.
"We make the case that headline non-farm payroll gains close to the current consensus could provoke a market reaction despite the lack of surprise," said Steve Englander, global head of FX research at Standard Chartered.
"A major piece of data that can be read as an optimistic signal could firm up rate expectations," he said, particularly as markets have recently backed away from pricing hikes.
The U.S. dollar index, which measures the greenback against six major currencies rose 0.1% in Friday's Asia session to 92.374 and is 0.3% higher for the week so far.
Elsewhere a path to rate hikes in coming years that was mapped out by the Bank of England on Thursday has supported sterling, which last bought $1.3920, while in emerging markets, the Thai baht was in capitulation mode.
The baht hit a three-year low and has lost more than 7% in seven weeks.
(Reporting by Tom Westbrook. Editing by Shri Navaratnam and Sam Holmes)
