* Dollar index recoils from 7-month highs, uptrend seen intact. * Sterling jumps as market covers large short positions. * Aussie dollar basks in jobs data afterglow. The rally in the U.S. dollar took a breather on Friday as sterling enjoyed a short squeeze, while the Australian dollar made the most of a barnstorming employment report at home. The dollar index stood at 82.544, having retreated from a seven-month peak of 83.166. Still, it is up nearly 5 percent from its Feb. 1 trough of 78.918. The pullback came as the euro bounced to $1.3010 from a three-month trough of $1.2911, partly cheered by solid demand for ... (full story)