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Euro gains vs dollar

The euro firmed against the dollar on Tuesday, approaching $1.40, as the greenback remained weak following last week's mixed job report.

NEW YORK: The euro firmed against the dollar on Tuesday, approaching $1.40, as the greenback remained weak following last week's mixed job report.

The Labor Department report Friday showed solid job growth in April and a sharp drop in the unemployment rate, but that masked worrying details about the labor market's underlying weakness.

The forex action came as traders looked ahead to Federal Reserve Chair Janet Yellen's testimony Wednesday on the US economic outlook in a Senate hearing of the Joint Economic Committee.

"Much of the dollar's bearish performance stems from Friday's US jobs report, which, although stronger, seemed to lack the muscle to bring forward the timetable for a Federal Reserve rate increase," said Joe Manimbo at Western Union Business Solutions.

Meanwhile, investor confidence in the eurozone gained a further boost from Italy, whose long-term borrowing costs fell below the three percent level for the first time since the creation of the euro.

The rate of return for investors on 10-year bonds on the secondary trading market -- the implied costs for governments to borrow fresh funds -- had dropped below three percent on Spanish bonds last week.

At 2200 GMT Tuesday    2100 Monday

EUR/USD 1.3926              $1.3874

USD/JPY 101.73 yen        102.14 yen

EUR/JPY 141.67 yen        141.72 yen

GBP/USD $1.6974           $1.6868

EUR/GBP 0.8205 pound  0.8223 pound

USD/CHF 0.8744 franc   0.8776 franc

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