FOREX-Dollar rises to 5-wk high vs euro, buoyed by US data

* Dollar rises after U.S. nonfarm payrolls report

* U.S. manufacturing activity holds steady in July

* Yen rises broadly as risk aversion increases (Recasts, updates prices, adds comments, changes byline)

By Gertrude Chavez-Dreyfuss

NEW YORK, Aug 1 (Reuters) - The U.S. dollar climbed to five-week peaks against the euro and three-week highs against the British pound on Friday as better-than-expected economic data allayed worries about a much sharper slowdown.

The yen, on the other hand, gained broadly, benefiting from heightened stress in financial markets on news that General Motors (GM.N: Quote, Profile, Research) had hefty losses in the second quarter. That dragged U.S. stocks lower and triggered safe-haven bids for Treasuries.

"U.S. dollar sentiment has certainly changed for the better over the last couple of weeks," said Mark Frey, head foreign exchange trader at Custom House, a global payments dealer in Victoria, British Columbia.

"The U.S. economy has gone through some tough phases, but the jobs number was negative, but still better than expected. I think, more importantly, recent consumer confidence numbers and leading indicators, which are more forward-looking, have been more positive," he added.

Friday's data showed that U.S. employers eliminated 51,000 jobs in July, lower than market expectations for a payrolls decline of 75,000. A separate report said U.S. factory activity was unchanged in July, compared with the previous month, but above market forecasts. For details, see [ID:nN01429062].