* Pace of U.S. hiring cools in December
* Fed minutes show some policymakers concerned about bond
* Dollar retreats from highest level since July 2010 vs yen
By Wanfeng Zhou
NEW YORK, Jan 4 The dollar pared gains versus
the euro and came off a near 2-1/2 year high against the yen on
Friday after U.S. jobs data bolstered expectations the Federal
Reserve will not be tightening monetary policy anytime soon.
The data came a day after minutes from the Fed's December
meeting showed some policymakers were contemplating an end to
their bond-buying program as early as this year, which sparked a
rally in U.S. bond yields and the dollar.
The pace of hiring by U.S. employers eased in December, the
Labor Department said. Nonfarm payrolls grew 155,000 last month,
in line with analysts' expectations and slightly below the level
for November. The jobless rate held steady at 7.8 percent.
"The most important point is that the latest unemployment
rate data has been broadly steady for four months now, so even
with decent employment growth no downward progress has been made
on the unemployment rate," said Alan Ruskin, head of G10 FX
strategy at Deutsche Bank in New York.
The data "will if anything push out the date for an end to
QE (quantitative easing), represents solidly risk-positive
numbers and will lead to some minor squeeze on recent U.S.
The dollar typically weakens when investors increase risk
exposure by buying higher-yielding currencies such as the
Australia and New Zealand dollars, and gains when investors are
risk-averse and seeking safe havens.
The euro was last little changed at $1.3042. It
touched a session high of $1.3058 after the release of the jobs
The dollar rose 0.6 percent to 87.79 yen, off a
session peak of 88.40 yen, according to Reuters data, the
highest since July 2010.
The Fed said in December they will keep interest rates near
zero until the unemployment rate falls to 6.5 percent for as
long as estimates of medium-run inflation do not exceed 2.5