LONDON (Reuters) - The dollar dipped against the euro on Friday, reversing some of its sharp gains the previous session following weak US jobs data which dampened hopes that the global economy is poised to recover.

Trading was extremely thin, however, due to the US Independence Day holiday, with most major currency pairs staying within very tight ranges.

On Thursday, data showed US economy lost a much greater than expected 467,000 jobs in June, while unemployment in Europe also rose to a 10-year high in May, pointing to a long, slow economic recovery and causing market sentiment to sour.

The bleak data pressured the euro and currencies perceived to be higher risk such as the Australian and New Zealand dollars, but on Friday they recouped some of those losses, which some in the market judged to have been overdone.

This kept the euro hovering around the $1.40 level, but it was still well below the $1.42 hit earlier in the week, which some analysts took as an indication that recent rallies against the dollar could be fizzling out.

"The euro, the Aussie and the Kiwi dollars have not rallied much from their lows and that is worrying," said Maurice Pomery, managing director at Strategic Alpha.

"A lot of people are still quite short dollars, but some of the components in the US non-farm payrolls numbers were very poor and equities are not out of the woods yet," he said.

At 3pm GMT, the euro was at $1.4000, up 0.4 percent from US levels at 2130 GMT. On Thursday, the pair fell as low as $1.3927, its lowest since June 25.

The euro also recovered against the yen to trade up half a percent at 134.44 yen. The Australian dollar climbed 0.9 percent against the dollar to $0.7993, while the New Zealand dollar rose 0.6 percent to $0.6302.

The dollar index, which tracks the dollar's value against a basket of currencies, was at 80.307, having risen as high as 80.612 on Thursday.

Intraday movements in most currencies were very limited, however, with analysts noting that most investors had already closed their positions ahead of the long weekend in the US.

Earlier in the session, the euro showed little reaction to data showing the euro zone services Purchasing Managers Index in June stood at 44.7, down from May's seven-month high of 44.8.

Separate figures showed euro zone retail sales fell 0.4 percent on the month in May, more than forecasts for a 0.1 percent slide.

With the US non-farm payrolls out of the way, investors will likely focus on a Group of Eight (G8) meeting on July 8-10 for any further debate on currency diversification plans.

A Japanese official said on Friday major countries should support the dollar as the key international currency at the summit, although emerging nations may discuss a new global reserve currency on the sidelines.

China has asked for a debate on a new global reserve currency when leaders from the G8 meet with the G5 emerging economies next week in Italy, a G8 source told Reuters.

"In the short term, moderate dollar strength is likely to be in the global interest in terms of keeping long-term rates down and relieving what may emerge as commodity price pressures on inflation down the road," Barclays Capital analysts said in a note to clients.