(Corrects to 'low' from 'high' in first paragraph)
* U.S. adds 157,000 jobs in January, jobless rate edges up
* Euro lifted by better-than-forecast euro zone PMI
* Yen continues weakening trend
By Wanfeng Zhou
NEW YORK, Feb 1 The dollar fell to a 14-month
low against the euro on Friday after U.S. jobs data reaffirmed
expectations the Federal Reserve will maintain its stimulative
policy and as euro zone factories had their best month in almost
The U.S. economy added 157,000 jobs last month, the Labor
Department said, and 127,000 more jobs were created in November
and December than previously reported.
The unemployment rate, however, edged up 0.1 percentage
point to 7.9 percent. The Fed repeated on Wednesday that it
would keep overnight rates near zero until the unemployment rate
hits 6.5 percent, as long as inflation does not threaten to
exceed 2.5 percent.
"In my opinion, we must now focus on the unemployment level.
Until that improves, I see no change in Fed policy," said
Matthew Lifson, senior analyst and trader at Cambridge
Mercantile Group in Princeton, New Jersey. "It looks like euro
euphoria will continue today."
The Fed's bond-buying and loose monetary policies have
pressured the dollar and analysts said the dollar will maintain
a negative bias as long as the U.S. central bank continues on
The euro rose as high as $1.3674, its strongest since
November 2011. It was last at $1.3654, up 0.6 percent on the
Earlier, a Purchasing Managers' Index survey showed euro
zone factories had their most resilient month in nearly a year
during January, helped by solid German output.
News that banks will repay less than expected in European
Central Bank three-year loans next week dented some demand for
the euro, but losses were limited by optimism the worst of the
region's debt crisis is over.
The dollar rose 0.3 percent to 92.03 yen, paring
gains after the jobs data.
"There are some positive aspects to this report in terms of
the revisions in November and December, but January's figure
was slightly below expectations," said Vassili Serebriakov,
currency strategist at BNP Paribas in New York.
"Overall I don't think this shows an acceleration in the
labor market trend. We have seen Treasury yields dip a little
bit and that is putting pressure on dollar/yen."
Selling the yen has become a one-way bet, with Japanese
Prime Minister Shinzo Abe heaping relentless pressure on the
Bank of Japan to ease monetary policy aggressively to jolt the
economy out of a decade-long malaise.
Later in the session, U.S. consumer sentiment and ISM data
will be released.
(Additional reporting by Gertrude Chavez-Dreyfuss in New York
and Nia Williams in London; Editing by James Dalgleish)