* Euro rises vs dollar, Swiss franc
* Traders cite talk of SNB activity
* Dollar hits 7-month high vs yen
* U.S. ISM index better than expected, boosts dollar (Recasts; updates prices, adds comment)
NEW YORK, April 1 (Reuters) - The euro rallied against the dollar on Thursday, lifted by quarterly positioning and gains in the single currency against the Swiss franc as investors looked ahead to the U.S. non-farm payrolls report.
Traders cited talk of intervention by the Swiss National Bank as lifting the euro against the franc, adding there was some SNB activity in the dollar/Swiss franc pair.
The SNB, however, declined to comment on the franc's price action.
We had that big upward move in euro/Swiss Franc and the talk is that it was SNB coming in, said Steven Butler, director of FX trading at Scotia Capital in Toronto.
That pushed the euro higher against the dollar as well although the euro was already rising even before the SNB move. So I think it's still some quarter-end rebalancing, he added.
Since the dollar gained about 5.6 percent against the euro in the first quarter, fund managers have had to buy back the euro zone currency to balance out their portfolios at the end of the quarter.
The euro rose 0.5 percent against the dollar to $1.3578 EUR=. It fell to record lows against the Swiss franc below 1.4150 francs EURCHF=, but then surged to session highs at 1.4410. It last traded up 0.6 percent at 1.4318 francs.
Meanwhile, the dollar climbed to a seven-month high against the yen on Thursday, bolstered by upbeat U.S. data and moves by Japan's investors to invest funds into higher-yielding currencies overseas to mark the start of its new fiscal year.
The dollar rose as high as 94.04 yen JPY=, according to Reuters data, its best level since late August 2009. It was last at 93.82 yen, up 0.4 percent on the day.
The dollar also rose 0.2 percent against the Swiss franc to 1.0552 francs CHF=.
Data showing the U.S. manufacturing sector expanded in March at its fastest pace in more than five years further boosted the yen and weighed on the euro. (For a report on the Institute for Supply Management index, please double-click on [ID:nEAP100022])
Definitely (the ISM) is a great number, better than expected, and I expect some dollar strength, said Dan Cook, senior market analyst at IG Markets in Chicago. The one negative was the small drop in employment -- not something you want to see in a week focused on employment.
The U.S. payrolls report is due on Friday, with analysts forecasting the economy added 190,000 jobs last month. Such an outcome would likely lift the dollar and boost expectations for higher U.S. interest rates.
Strong manufacturing data from Europe and Asia also boosted risk appetite and the view that recovery is taking hold in economies around the world. That, however, kept dollar gains in check against other major currencies, including the pound and Canadian dollar.
We had a slew of nice upside surprises from manufacturing data in China, Europe, the UK ... so that's a good start to the month and if we get a good payrolls number (Friday), that's a dollar-positive, said Matthew Strauss, senior currency strategist at RBC Capital Markets in Toronto.
A spike in risk appetite also encouraged Japanese investors to sell the yen as the new fiscal year gets underway.