LONDON - The dollar was pinned near a three-week low on Friday ahead of payrolls data that could influence how quickly the Federal Reserve cuts rate, while the pound firmed as the Labour party surged to a landslide victory in the UK general election.

The euro was also on track for its biggest weekly gain of the year against the dollar, bolstered by signs France could be heading for a hung parliament in elections on Sunday rather than a ruling majority for the far-right National Rally.

Meanwhile, cryptocurrencies tumbled ahead of the anticipated dumping of tokens from defunct Japanese exchange Mt. Gox, with bitcoin heading for its worst week in over a year.

The dollar index - which tracks the U.S. currency against six major peers - was down 0.2% on the day at 104.94 ahead of key non-farm payrolls data due later on Friday. The index was set for a 0.8% weekly fall.

The payrolls report is expected to show an increase of 190,000 jobs in June after a rise of 272,000 in May, according to a Reuters poll of economists.

A slew of economic data showing a cooling U.S. economy has heightened expectations the data-sensitive Fed will cut rates sometime soon.

Currency analysts at MUFG said in a note that they saw greater downside risks from the payrolls consensus forecast, and that a figure of less than 150,000 could lead to greater conviction of a rate cut in September.

"There appears to be a growing expectation that weaker labour demand will now see a clearer pick-up in the unemployment rate," MUFG analysts said. "That makes us believe that a clear pivot from the Fed on weaker jobs data is very plausible."

Investors are also closely watching political machinations in the U.S., with President Joe Biden coming under pressure from some within his own Democratic party to step aside ahead of the November election.

Among the events being watched closely is Biden's interview with ABC News on Friday that will be aired in full at 8 p.m. ET (0000 GMT Saturday).

The pound and British stocks rose after the centre-left Labour Party surged to a comprehensive win in the country's election. Sterling was last up 0.2% at $1.278 and was heading for a 1% weekly gain - its best week in seven.

The euro, which has been under pressure since French elections were called in June, has rallied somewhat this week and is on track for a 1% weekly gain. It was last up 0.1% on the day at $1.0828.

The dollar slipped 0.4% versus the yen to 160.715, a second straight day of declines - something that has not happened since the start of June.

The currency is crawling slowly away from the 38-year low of 161.96 on Wednesday but traders remain on alert for intervention from Japanese authorities.

Finance Minister Shunichi Suzuki said on Friday that authorities will closely monitor both the stock and foreign exchange markets with a sense of urgency.

Traders have been wary of Tokyo intervening in the market to prop up the currency which has lost more than 12% against the dollar this year, weighed down by the wide interest rate difference between Japan and the United States.

(Reporting by Iain Withers, Additional reporting by Ankur Banerjee and Sameer Manekar in Singapore; Editing by Anil D'Silva)