The U.S. dollar declined Friday, losing ground against most major rivals, after the Labor Department said U.S. employers cut 651,000 jobs in February, pushing the unemployment rate to the highest in 25 years.
The euro rose to $1.2703 from $1.2538 in late North American trading Thursday.
The dollar retreated to 97.158 yen versus the Japanese currency, down 0.9% on the day.
The dollar index which measures the currency against a trade-weighted basket of six global counterparts, fell to 88.091, down from 89.102.
Economists polled by MarketWatch predicted a loss of 650,000 jobs, though bonds had been lower before the data as some traders were bracing for higher numbers. The government also revised January and December data to reflect higher job losses. See more on jobs report.
The unemployment rate rose to 8.1% from 7.6% in January. Economists predicted the rate would increase to 8%.
Although the dollar has benefited in the past from safe-haven flows amid equity weakness and signs of rising economic and financial turmoil, some strategists say a renewed focus on the U.S. economic outlook could begin to weigh on the greenback.
Seemingly "outlandish" talk that losses could reach or exceed 1 million in February added to weak sentiment, said Simon Derrick, currency strategist at Bank of New York Mellon.
The single currency recovered from a slide that left it trading around $1.2548 after European Central Bank President Jean-Claude Trichet left the door open to further rate cuts following policy makers' decision to trim the key rate to a record low 1.5%. See full story.
The currency on Thursday hit an intraday low of $1.2479.
The British pound rose to $1.4245, rebounding from $1.4121 versus the dollar late Thursday.
The pound was pressured Thursday after the Bank of England cut its benchmark rate 50 basis points to 0.5% and announced it would take extraordinary steps to boost the money supply in an effort to head off deflation. See full story.
