LONDON (AFP) - The euro gained against the dollar on Friday after a slowing of the decline in US manufacturing boosted riskier currencies such as the European single currency amid hopes of a US recovery, dealers said. The euro was changing hands at 1.3275 dollars in late afternoon trading in London, up from 1.3232 on Thursday. The euro was also up against the Japanese yen at 131.34 yen compared to 130.54 yen previously. The dollar and the yen usually gain during times of economic uncertainty as they are seen as safe havens on currency markets, while the euro usually gains at times of greater stability because it is seen as a riskier bet. The US factory sector slumped in April for a 15th straight month but the pace of decline was less severe than expected, new data showed Friday in another upbeat sign for the recession-hit US economy. The US Institute of Supply Management said its index of the manufacturing sector rose to a higher-than-expected 40.1 percent from 36.3 percent in March the highest reading since September and the fourth straight uptick. Another survey showed rising confidence among US consumers in April. The generally upbeat data boosted the euro, which had fallen on Thursday on the back of uncertainty linked to the bankruptcy of US auto giant Chrysler and new data showing a drop in US consumer spending after two monthly increases. The yen was instead dragged down as gloomy consumer and unemployment data underlined Japans economic woes. Trading in Tokyo was winding down ahead of holidays next week, while most dealers in Europe were on a May Day holiday. Earlier this week, the US government estimated that the economy contracted by a massive and higher-than-expected 6.1 percent in the first quarter of 2009, only marginally better than the 6.3 percent fourth-quarter slide. Most analysts have however been cautiously optimistic that the first signs of a modest economic recovery are appearing. But investors remain concerned ahead of the release of a key US bank stress test report expected next week. Players have recently been somewhat optimistic about the US economy, but results of stress tests cannot be all positive, Mamoru Arai, a senior dealer at Mizuho Corporate Bank in Tokyo, told Dow Jones Newswires. Thus, any negative findings in the results would prompt risk-aversion movement meaning a possible boost for the euro over the dollar.