* Euro up vs dollar, traders cite Asian sovereign demand
* U.S. private jobs grow less than expected in April
* Euro seen testing $1.50 if ECB takes hawkish rate stance (Updates prices, adds U.S. data, comment, change byline)
By Steven C. Johnson
NEW YORK, May 4 (Reuters) - The dollar hovered just above a three-year low on Wednesday and the euro jumped as data showed the United States added fewer private jobs than expected in April, boosting views U.S. interest rates would remain low.
The euro rose above $1.49, its highest level since late 2009, and traders expect an imminent break of $1.50. Investors brushed off news of a euro bailout package for Portugal, the third euro zone country to need emergency aid.
For more, see [ID:nLDE7422CB] and [ID:nEAPA40EH0]
"This appears to be a bump in the road for recovery if indeed the pace of job recovery has slowed," said Michael Woolfolk, strategist at BNY Mellon. "It certainly feeds into the notion that the Fed won't be hiking interest rates soon."
Unlike the Federal Reserve, the European Central Bank rose rates last month for the first time since 2008 and is expected to do so again this year, though most traders expect it to stand pat at its policy meeting on Thursday.
Markets do not expect the Fed to raise rates from near zero until 2012.
The euro rose as high as $1.4928, a 17-month peak, and was
last up 0.7 percent at $1.4920
Analysts expect the euro rise above $1.50, though some say the market may wait for Thursday's ECB meeting.
DOLLAR SENTIMENT STILL NEGATIVE
Investors will get another look at the U.S. job market Friday with the government's nonfarm payrolls report, expected to show a 186,000 job gain after March's 216,000 tally.
Signs of softer U.S. economic growth coupled with worries about U.S. ability to get the country's large fiscal deficits under control have increased negative sentiment on the dollar, which is down some 8 percent against the basket of major currencies this year.
The ECB, meanwhile, is expected to signal on Thursday it will raise rates in the coming months to tame inflation, even as higher rates make it even more difficult for weak euro zone countries -- including Portugal -- to service their debts.
Traders said reserve managers and investors positioning for higher rates were buyers and said a correction would probably require the euro to fall below Tuesday's low around $1.4750.
"The currency market seems to have learnt to live with the struggles of the peripheral euro zone nations." said Audrey Childe-Freeman, currency strategist at JP Morgan Private Bank.
Roberto Mialich, strategist at Unicredit in Milan, said, "there are still no big incentives to go significantly short euros. At the end of the day, the dollar will be sold again, and it's just a matter of time for a test of $1.50."
If the ECB surprises markets, though, and doesn't signal more hikes ahead or if U.S. jobs gains are bigger than expected on Friday, the dollar could be ripe for some buying interest.
Some gauges of market positioning suggest speculators and hedge funds have hefty short dollar positions against emerging Asian currencies and others including the Australian dollar, leaving open the possibility of more position unwinding.
But the U.S. dollar has been unable to build on short-covering support seen in past days, and investors are likely to look for fresh selling opportunities.
The Australian dollar
The Aussie, which hit a near-three decade high above $1.10 this week, suffered losses after it and other commodity-based currencies took a hit from a drop in silver prices. (Additional reporting by Naomi Tajitsu in London; editing by W Simon )