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Lacklustre US job report sends dollar lower vs euro

A disappointing US jobs report for January sent the dollar lower against the euro on Friday, but both headed higher against the yen.

NEW YORK: A disappointing US jobs report for January sent the dollar lower against the euro on Friday, but both headed higher against the yen.

The US report, which showed only 113,000 jobs were added last month against expectations of some 175,000, sparked concerns of a slump in the economy, coming after dismal numbers in December.

That raised speculation that the Federal Reserve could slow the pace of its program to reduce and eventually end its huge bond-buying stimulus program that has pumped easy money into the US and global economy for three years.

At 2200 GMT the euro was at $1.3637, up from $1.3591 late Thursday, capping a week of steady gains against the greenback.

The dollar also ceded ground to the British pound on the news, the pound moving to $1.6407 from $1.6323.

Friday's US jobs disappointment contrasted with the European Central Bank's holding firm on its interest rate policy Thursday, with bank head Mario Draghi brushing off widespread talk of a deflation threat.

David Song of DailyFX said the dollar faces growing speculation that Federal Reserve policy makers "may take a less-aggressive approach in normalizing monetary policy" after the poor jobs numbers.

"We may see the central bank implement a more dovish twist to its forward-guidance or even opt for a smaller series of reductions in the asset-purchase program as Janet Yellen takes the helm."

Others though said they would wait for Yellen's public statements on Fed policy next week, her first since taking the chair of the central bank from Ben Bernanke on February 1. She testifies to a committee of the House of Representatives on Tuesday and then a Senate committee on Thursday.

The yen however gave up ground Friday against both the dollar and euro. The dollar rose to 102.30 yen from 102.10, while the euro was at 139.52 yen, up from 138.79.

The dollar meanwhile slipped to 0.8977 Swiss franc from 0.9004 franc.

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