Dollar strengthens after jobs report

NEW YORK (CNNMoney.com) -- The dollar rose against its main trading partners Friday amid ongoing concerns about sovereign debt problems in Europe and a mixed report on the U.S. job market.

What currencies are doing: The dollar was up 0.4% versus the euro to $1.3678, and gained 0.8% against the British pound to $1.5638. It rose 0.3% versus the Japanese yen to ¥89.32.

What's moving the market: Traders have been flocking to the safety of the dollar as the fiscal problems facing Greece, Portugal and Spain continue to deepen.

While few analysts expect any of those countries to default on their debts, rising borrowing costs in Europe threaten to derail the sluggish economic recovery there. Those concerns weighed on stocks in Europe.

"As markets keep a close watch on Greek bonds and the budget proceedings in (the) Portuguese parliament, the negative FX bias is here to stay," Ashraf Laidi, chief market strategist at CMC Markets in London, wrote in a note to clients.

In the United Sates, however, stocks ended slightly higher as investors digested a mixed reading on the nation's job market.

The government said employers cut 20,000 jobs in January after a revised loss of 150,000 jobs in December. Economists surveyed by Briefing.com had expected a net gain of 15,000 jobs in December.

But the government said the tepid job growth initially reported in November was actually much stronger than previously believed. And the the unemployment rate fell to 9.7% from 10%.

What analysts are saying: "The U.S. dollar quickly recovered after an initial spike lower as traders found relief in the encouraging signs within the labor market report," said Kathy Lein, director of currency research at New York-based trading firm GFT.

"The jobs data was bad but not horrible because at minimum the pace of job losses is slowing and more importantly the manufacturing sector reported the first month of positive job growth after 25 months of consecutive job losses," she said.