* Euro hits session high after U.S. jobs data
* U.S. non-farm payrolls growth much lower than forecast
* Oil slips below $102, heads for weekly drop on dollar (Adds opening U.S. markets, changes dateline; previous LONDON)
By Herbert Lash
NEW YORK, Sept 5 (Reuters) - The euro edged higher against the dollar and global equity markets pared losses on Friday after data showed U.S. jobs growth slowed in August, raising chances that interest rates will stay low for a longer period than markets had expected.
The dollar fell after data showed U.S. non-farm payrolls grew by only 142,000 last month, far below the 225,000 increase forecast by analysts in a Reuters poll. The July figure was revised upward to 209,000.
The FTSEurofirst 300 index of top European shares cut some losses to trade down 0.4 percent at 1,395.42, after falling as low as 1,391.39 earlier in the session. MSCI's all-country index fell 0.25 percent.
U.S. equity investors took the surprisingly weak data as a sign the Federal Reserve will not boost rates anytime soon.
"One of the big fears of this market, maybe the only fear, has been rapidly rising interest rates. This puts an end to those thoughts in the near term," said Rick Meckler, president of hedge fund LibertyView Capital Management LLC in Jersey City, New Jersey.
Mohamed El-Erian, chief economist at Allianz in Newport Beach, California, said although the payrolls report was disappointing, it was more solid in key components, such as improvement in the unemployment rate to 6.1 percent.
"All this will reinforce the Federal Reserve's 'steady as she goes' policy approach," El-Erian said.
The Dow Jones industrial average was down 29.73 points, or 0.17 percent, at 17,039.85. The Standard & Poor's 500 Index was down 3.46 points, or 0.17 percent, at 1,994.19. The Nasdaq Composite Index was down 13.02 points, or 0.29 percent, at 4,549.27.
The greenback scaled back from a nearly six-year high against the yen in early trading, and the euro recovered from a 14-month low against the dollar a day after a surprise rate cut from the European Central Bank.
The euro edged up 0.12 percent against the dollar at $1.2960 after shedding 1.6 percent on Thursday, its steepest fall in almost three years, after the ECB cut rates to record lows and launched a bond purchase program to avert deflation.
On the EBS trading system, the dollar last traded down 0.41 percent at 104.83 yen after it touched a nearly six-year high of 105.71 yen in Asian trading.
The 10-year U.S. Treasury note rose 6/32 in price to yield 2.4247 percent.
Brent crude oil fell to $101 a barrel as a strong dollar depressed demand and the jobs data report suggested the U.S. economy was growing more slowly than expected.
Oil prices on both sides of the Atlantic fell nearly $1 on Thursday as the ECB rate cut led to a spike in the dollar, making it more expensive for holders of other currencies to buy the dollar-denominated commodity.
Brent was down 83 cents at $101.00 a barrel. U.S. crude was 87 cents lower at $93.58 a barrel.
Nonfarm U.S. payrolls: link.reuters.com/ram54t
(Additional reporting by Atul Prakash in London, Reporting by Herbert Lash)