NEW YORK – The dollar gained on the euro Friday after a weaker-than-expected US employment report prompted buying of the safe-haven greenback on a day when gold prices surged to a record high.
The euro dipped to $1.4846 at 2200 GMT against 1.4868 late Thursday in New York.
The dollar fell to 89.90 yen after 90.72 on Thursday, losing ground against another safe-haven currency.
Currency market sentiment was dominated by news that the US unemployment rate jumped to double digits in October for the first time since 1983, reaching 10.2 percent and underscoring slow progress toward curbing joblessness in an economy emerging from recession.
Friday's Labor Department report, seen as one of the best indicators of economic momentum, showed non-farm job losses narrowed last month to 190,000.
That improvement was not enough to prevent the jobless rate from surging to the first double-digit level for more than 26 years, from 9.8 percent in September.
"Non-farm payrolls prompted a knee-jerk bout of dollar buying, as bad economic news was viewed to be negative for risk appetite and for dollar carry trades," said Michael Woolfolk at Bank of New York Mellon.
"However, dollar gains proved short-lived...This morning's price action indicates that players were right to be cautious going into today's non-farm payrolls report. Both dollar bulls and bears were likely disappointed in the whipsaw price action this morning."
Analyst Rob Carnell of ING Financial Markets said that "with markets feeling a degree of indecisiveness at current junctures, today's figures will have injected a further dollop of doubt about the sustainability of the recovery and of recent market gains."
Michael Malpede at Easy Forex said the weak report will prompt the Federal Reserve to maintain its near-zero interest rate policy, which hurts the dollar.
"The October employment report will reduce the likelihood of an early Fed rate hike," he said.
"The Federal Open Market Committee indicated at this week's meeting that the Fed is unlikely to consider a hike until the US starts to produce jobs."
The employment data, deepening investor uncertainty about the fundamental health of the US economy, led traders to abandon currencies such as the euro and the pound sterling for those seen as less risky, notably the dollar.
The price of gold, meanwhile, hit a record high above 1,100 dollars an ounce following a report that Sri Lanka had joined India in purchasing the precious metal in favor of the US currency.
Gold had already struck a series of high points this week after the IMF said it had carried out a massive sale of the precious metal to India.
In late New York trade, the dollar stood at 1.0171 Swiss francs after 1.0162 Thursday.
The pound was at $1.6611 from 1.6577.
