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* Dollar at 3-1/2 month low vs major currencies
* MSCI World up as PMIs point to global expansion
* U.S. stock futures firm before nonfarm payrolls
* Growth optimism lifts gold, copper, Brent oil
By Richard Hubbard
LONDON, Feb 1 (Reuters) - The dollar fell and world stocks gained on Friday as fresh economic data signalled that the euro zone's downturn has eased and China's growth was on track, but moves were limited as investors await a U.S. jobs report.
American employers are expected to have added 160,000 new jobs to their payrolls in January, a marginal rise on December's 155,000 gain, and a stronger number could knock the safe-haven dollar further as it would signal a strengthening recovery.
U.S. stock index futures pointed to a higher open on Wall Street on Friday, reflecting the hopes for jobs growth, while the dollar languished at a 3-1/2 month low against a basket of currencies.
MSCI's world equity index added 0.5 percent to stay close to its best level since May 2011.
Earlier, shares moved higher across Europe when euro zone factories recorded their best month in nearly a year during January although remaining mired in recession, according to the Markit Purchasing Managers' Index (PMI).
"Providing there are no further setbacks to the region's debt crisis, these data add to the expectation that the euro zone is on course to return to growth by mid-2013," said Chris Williamson, chief economist at data compiler Markit.
The euro hit a high of $1.3657 after the data came out, its highest level since November 2011, before settling to show a gain of 0.5 percent at $1.3643.
The common currency also hit a 33-month high against the yen, rising more than 1 percent to 125.96 yen.
The pan-European FTSEurofirst 300 index extended its recent gains by 0.2 percent to 1,166.67 points, near a 23-month high after solid rally since the start of the year. London's FTSE 100, Paris's CAC-40 and Frankfurt's DAX were up between 0.5 and 0.8 percent.
Earlier, China's official PMI for January eased to 50.4, but held above the 50 mark which separates expansion from contraction, while a separate private survey showed growth in the manufacturing sector had hit a two-year high, underlining hopes the nation's economic recovery is slowly gaining momentum.
The mixed reading left MSCI's broadest index of Asia-Pacific shares outside Japan little changed.
A report from the Institute for Supply Management, due out at 1500 GMT, is likely to show that American factories joined in the modest global expansion in January.
Both the euro and European stocks trimmed some of their gains when the European Central Bank said the region's banks would return only 3.5 billion euros ($4.75 billion) of its emergency 3-year loans in a second repayment window next week.
The banks, which borrowed over one trillion euros of the cheap money at the height of the euro zone crisis, have another two years to pay it back if they want but took the opportunity this week to return a surprisingly large amount of the loans.
The quicker-than-expected repayments have triggered a rise in money market interest rates, effectively tightening monetary conditions, and rates could keep climbing if the money continues to drain from the system.
For Europe's struggling countries and the ECB this is not an ideal situation, effectively tightening monetary policy and creating unwanted stress just as economies are showing fragile signs of improvement.
It also comes as the Federal Reserve is undertaking a massive monetary stimulus in the United States and the Bank of Japan has come under strong pressure from the new government in Tokyo to add liquidity to boost its economy.
"The perception is that the ECB is being less supportive and is not providing as much liquidity as the other central banks are," said Andrew Milligan, head of Global Strategy at Standard Life Investments.
The approach of the U.S. jobs report was limiting moves in commodity markets which were generally supported by the rising confidence in the outlook for global growth.
Gold was up 0.2 percent at $1,665.91 an ounce, silver was up 0.1 percent at $31.43 an ounce and three month copper on the London Metal Exchange rose to $8,199 a tonne, up 0.4 percent .
Iron ore, which is particularly sensitive to economic growth, climbed to its highest level in more than two weeks to around $152.50 a tonne .
"The impression is that things are improving slowly on the macroeconomic front. The data seems to be moving in the right direction and we have had more positive surprises than negative surprises," said Robin Bhar, a metals analyst at Societe Generale.
In the oil market the rising economic optimism coupled with tension across the Middle East, the world's biggest oil producing region, has put Brent crude on track to its biggest weekly gain in two months, while U.S. crude is set to rise for an eighth straight week.
Brent oil was up 33 cents to $115.88, although U.S. crude futures slipped 27 cents to $97.22 a barrel.