The Institute for Supply Management (ISM) said on Thursday its employment sub index jumped to 54.7 from March's 51.1, which had been the weakest since June 2013. Analysts were looking for 52.8.
"Where the risk lies for the dollar is if there is a considerable undershoot (in payrolls). That will drag down U.S. yields and we could see dollar/yen tumble, sterling rise past Thursday's highs and euro back above $1.39," Stretch added.
Sterling buoyant, swedish crown weak
Major currencies showed limited reaction to latest developments in Ukraine, where government forces launched an operation to retake Slaviansk, pro-Russian separatists holding the town in eastern Ukraine said on Friday.
A big mover was the Swedish crown, which fell after more disappointing data. Sweden's purchasing managers' index (PMI) fell to 55.5 points for the manufacturing sector in April from 56.5 points in March.
Read MoreIs sterling punching above its weight?
The euro rose 0.2 percent to 9.04 crowns amid higher-than-usual volumes on the Reuters Matching platform.
Sterling took a breather in the wake of upbeat UK economic indicators and strong expectations of rate hikes early next year.
UK construction sector PMI will be released at 0830 GMT.
"Sterling could be the big winner were non-farm payrolls to disappoint today and perhaps an intra-Europe trade on the back of a stronger NFP could be long sterling/Swiss franc," Chris Turner, head of FX strategy at ING, said in a note.