Dollar gains on euro, yen
Greenback rallies after government report shows that the U.S. shed fewer jobs that expected in May.
NEW YORK (Reuters) -- The dollar gained against the yen and euro Friday after data showed the United States shed fewer jobs than expected last month, boosting hopes of an economic recovery and raising risk tolerance.
Government data showed the U.S. economy shed 345,000 jobs in May, below the 520,000 expected by economists and the revised 504,000 jobs lost in April. The jobless rate rose to 9.4%.
The euro initially rallied on the news but quickly gave up gains as investors digested the jobs number and stop-loss orders were breached in the euro's sharp rise.
"We hit stops above $1.4260 in euro/dollar and once that was paid we're seeing a pullback. The market is bailing out of euros now," said Brian Dolan, chief currency strategist, at Forex.com in Bedminster, N.J. "The view here is that these better-than expected jobs numbers should enable the United States to come out of recession first, leading to a stronger dollar overall."
The dollar rose to ¥97.95, up 1.4% on the day, after earlier touching ¥98.08, its highest in nearly a month. The euro was last trading at $1.4096, down 0.6% on the day after initially jumping to $1.4269 after the data, then plunging to $1.4080.
The dollar index, the dollar against a basket of six currencies, rose 0.7% to 79.990, according to Reuters data, trading at its highest in a week.
"We are seeing a reduction in risk aversion," said George Davis, senior currency strategist at RBC Capital Markets in Toronto. "I think it will set the tone for the day with the dollar under pressure. The data provides another piece of evidence to support the theory" that the U.S. economy is improving. 
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