(Updated at 10:00 EDT (1400 GMT))

By Karen Brettell

NEW YORK, Oct 2 (Reuters) - The dollar hit a three-week

high against the euro on Wednesday after the ADP national

employment report showed U.S. private payrolls increased more

than expected in September, ahead of Friday's highly anticipated

jobs data.

Traders are also keeping a close eye on geopolitical

tensions a day after Israel was attacked by Iran in a strike

that raised fears the oil-producing Middle East could be

engulfed in a wider conflict.

Private payrolls increased by 143,000 jobs last month after

rising by an upwardly revised 103,000 in August, the ADP

National Employment Report showed on Wednesday. Economists

polled by Reuters had forecast 120,000 job additions.

"The ADP number looked pretty good and points to a decent

NFP print," said Brad Bechtel, global head of FX at Jefferies in

New York.

The government nonfarm payrolls report for September on

Friday is expected to show employers added 140,000 jobs during

the month, while the unemployment rate stayed steady at 4.2%,

according to economists polled by Reuters.

Improving economic data and more hawkish comments from

Federal Reserve Chair Jerome Powell on Monday have boosted the

dollar and led traders to pare bets that the U.S. central bank

will cut rates by another 50 basis points when it meets next

month.

There is "a little bit of a subtle shift here where people

are less concerned about the U.S., pricing less in terms of

aggressive rate cuts here in the U.S., and shifting views on

other areas," Bechtel said.

Traders are now pricing in a 34% probability of a 50 basis

point cut at the Fed's Nov. 6-7 meeting, down from 57% a week

ago, the CME Group's FedWatch Tool shows.

The Institute for Supply Management's non-manufacturing

report on Thursday will also provide further clues on the

strength of the U.S. economy.

The dollar index rose to 101.58, the highest since

Sept. 11, from 101.20 late on Tuesday. The euro fell

to $1.10433, the lowest since Sept. 11, from $1.10683.

The single currency has weakened on increasing expectations

that the European Central Bank will cut interest rates later

this month as inflation recedes.

The yen also weakened after Prime Minister Shigeru Ishiba

said Japan is not in an environment for an additional rate

increase, an apparent effort to shake off his reputation as a

monetary hawk, after a meeting with Bank of Japan Governor Kazuo

Ueda on Wednesday.

The dollar gained to 145.73 yen from 143.57 late

on Tuesday.

Demand for safe haven currencies including the yen and the

Swiss franc ebbed on Tuesday as tensions in the Middle East

appeared to die down.

Iran said on Wednesday the attack - its biggest assault on

Israel - was over barring further provocation, but Israel and

the U.S. promised to hit back hard.