* U.S. non-farm payrolls worse than expected
* But unemployment rate falls
* Aussie gains after mining tax bill diluted
(Updates to midday)
By Nick Olivari
NEW YORK, July 2 The U.S. dollar slipped
against the euro on Friday, extending the previous day's steep
losses on concerns over the U.S. economic recovery after
disappointing U.S. jobs data.
U.S. private payrolls rose less than expected in June and
overall employment fell for the first time this year as
thousands of temporary Census jobs ended, indicating the
economic recovery is failing to gain traction. For more
The euro gained against the dollar as investors looked
past economic problems in the euro zone and instead focused on
the possibility of a stalled economic recovery in the United
"What this does is, it reinforces the market's view that
the U.S. recovery is losing steam," said Greg Salvaggio, vice
president of trading at Tempus Consulting in Washington.
"There's a growing concern in the marketplace right now
that previously the U.S. was thought to be the economy which
was going to drive forward, regardless of events happening
elsewhere in the world," Salvaggio added. "Now there are some
very, very serious concerns that the U.S. recovery is
beginning to stumble."
Friday's U.S. jobs report follows weak housing and
manufacturing data on Thursday and weak consumer confidence
data earlier in the week.
In early New York trade, the euro last traded at $1.2591
EUR=EBS on electronic trading platform EBS, up 0.6 percent
on the day. The single currency rose as high as $1.2613 -- the
first time over the 1.2600 level since May 21.
"We are at a phase at the moment when the dollar reacts
negatively to poor U.S. data, which we have quite a lot
recently," said Tom Levinson, currency strategist at ING in
The euro was already bolstered by easing concerns about
euro-zone liquidity problems after a lower take-up of European
Central Bank funding and successful bond auctions on
On Thursday, the euro surged more than 2.0 percent in its
biggest one-day advance since mid-March last year. However,
some analysts remained cautious about the single currency
ahead of European bank stress test results and a Greek T-bill
issue due later this month.
The Australian dollar AUD= rose for the second straight
day, climbing as high as $0.8510, before paring gains to trade
at $0.8457, up 0.3 percent for the day, and also rose against
the yen after the Australian government agreed to a
watered-down version of a proposed mining tax, easing concerns
the tax would hurt business investment. [ID:nSGE6600LW]
"The Australian dollar was buoyed by a mining tax deal
reached in that country," said TJ Marta, chief market
strategist at Marta on the Markets, in Scotch Plains, New
The dollar was last at 87.77 yen on EBS JPY=EBS, up 0.2
percent for the day.
On Thursday, the greenback hit a seven-month low against
the yen JPY=. Japanese exporter offers were likely to emerge
in the low 88-yen range, a dealer at a Japanese bank said.
One-month implied volatility for dollar/yen pulled back to
around 12.2 percent JPYVOL from around 14 percent on
Option triggers were seen below 85 yen, traders said.
Last November, the dollar hit a 14-year low against the
The dollar fell for the fourth straight week against the
yen, losing an additional 1.7 percent and bringing the total
loss over the four weeks to 4.5 percent.
For the week, the euro gained 1.8 percent against the
dollar, reversing a loss from the previous week.
(Additional reporting by Wanfeng Zhou)
(Reporting by Nick Olivari; Editing by Jan Paschal)