The dollar fell Friday against the euro but rose against the yen as the foreign exchange market assessed the impact of "stress tests" on the struggling US banking sector. Financial markets were meanwhile waiting for the release of US jobs data for April due later in the day, amid hopes that the recession in the world's largest economy may be abating. In morning trading in London, the European single currency rose to 1.3418 dollars from 1.3386 dollars late on Thursday in New York. Against the Japanese currency, the dollar advanced to 99.39 yen from 99.09 yen late Thursday. Investors appeared unruffled by the stress tests, which found that 10 major US banks need to raise a total of 74.6 billion dollars (55.7 billion euros) in new funds to shield against the risk of a further economic downturn. "The uncertainty dogging foreign exchange markets diminished somewhat overnight as the results of the US bank stress tests were released largely as expected," said Stuart Bennett, senior strategist at Calyon, the investment banking arm of French bank Credit Agricole. Federal Reserve Chairman Ben Bernanke said on Thursday that nearly all of the banks had sufficient capital to absorb higher losses should the economy worsen. "This reassured investors that the major banks could continue to lend even if the economy got a lot worse," said NAB Capital analyst John Kyriakopoulos. Bernanke also pointed out that the Treasury "stands ready to provide whatever additional capital may be necessary to ensure that our banking system is able to navigate a challenging economic downturn." Bennett added: "The results look rather reassuring as the total number roughly match the most recent expectations, and as some details look better than expected." The euro extended Thursday's gains that were sparked by news the European Central Bank will buy bonds to spur credit flows, while cutting interest rates to 1.0 percent. The single currency had initially fallen in response to the ECB's decision but quickly rebounded on hopes that the action will ease the eurozone's recession, dealers said. The pound rose against the dollar, after sliding Thursday when the Bank of England surprised markets by announcing it would pump an additional 50 billion pounds (75 billion dollars) into the financial system. In trading in London on Friday, the euro was changing hands at 1.3418 dollars against 1.3386 dollars late on Thursday, at 133.29 yen (132.64), 0.8925 pounds (0.8918) and 1.5129 Swiss francs (1.5128). The dollar stood at 99.39 yen (99.09) and 1.1282 Swiss francs (1.1299). The pound was at 1.5026 dollars (1.5008). On the London Bullion Market, the price of gold rose to 913.91 dollars an ounce from 912.25 dollars an ounce late on Thursday.

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