The dollar dove as the U.S. government said the unemployment rate increased to 9.8 percent last month from 9.6 percent in October. That's the first increase since August and the highest level of joblessness in seven months.
Economists were expecting the economy to add about 150,000 jobs last month, nearly as many as in October. Instead, employers added only 39,000 jobs.
"Recent labor market news has generally shown an improvement, but this report is a clear break to that trend," wrote Kevin Logan, HSBC's chief U.S. economist, in a research note.
In late morning trading in New York, the euro jumped to $1.3375 from $1.3210 late Thursday. It earlier edged above $1.34 for the first time since Nov. 24.
The euro had fallen about 10 percent in November as traders nervous about a deepening European debt crisis sold off the shared currency. The euro has rebounded in recent days as the European Central Bank said it would extend emergency liquidity measures, supporting Europe's financial system. Traders have acted on rumors that the central bank was stepping up its purchases of the debt of the 16-nation region's most indebted members.
In other trading Friday, the British pound rose to $1.5741 from $1.5584, while the dollar fell to 82.90 Japanese yen from 83.90 yen. The U.S. currency also slid to 0.9777 Swiss francs from 0.9936 Swiss francs, but edged up to 1.0045 Canadian dollars from 1.0034 Canadian dollars.
The dollar slid 1.2 percent against an index of six major currencies, a steep decline.
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