.gif)
The euro plunged to its lowest level against the dollar since late May on Friday, dragged down by persistent anxiety over the state of public finance in the eurozone and after disappointing US employment figures.
The single European currency in late-day trade fell to 1.3595 dollars, its lowest reading since May 20, against 1.3726 dollars on Thursday in New York. It was later trading at 1.3613 dollars.
The dollar was meanwhile trading at 89.31 yen after 89.01 on Thursday.
Investors abandoned the euro for the dollar, seen as a safer haven in times of stress, after the Labor Department in Washington reported that the US economy shed 20,000 jobs in January, offering mixed signals about prospects for a sustainable economic recovery.
The department report also showed the jobless rate eased to 9.7 percent from 10.0 percent in December, based on a household survey that appeared to contradict the payrolls data.
The nonfarm payrolls data, one of the best indicators of economic momentum, fell short of expectations for a gain of 15,000 jobs that would have been a clear sign of a turnaround in the troubled labour market and overall economy after a massive stimulus effort by the government.
"This was a mediocre report," said Dana Johnson, chief economist at Comerica Bank.
Still, Johnson said there were encouraging signs in the data including a rise in the workweek, increased income and more temporary workers hired.
"I would be surprised if we didn't see private-sector job growth in February and March that will show a sustainable expansion. It's just not visible yet," Johnson said.
Wells Fargo economist Eugenio Aleman said the significant drop in the unemployment rate, which was better than expected, is a positive factor.
"It's a very strong drop," Aleman said. "It's good news but I don't know if it is sustainable."
Earlier in the day eurozone financial turmoil weighed heavily on the single currency as well as on equity markets, with investors worried that debt-ridden countries such as Greece, Spain and Portugal may be unable to restore stability to their public finances after having spent heavily to combat recession.
"Fears that governments had taken on too much debt bailing out broken banks and propping up their economies was a localised problem until now," said ECU Group analyst Kit Juckes.
"It has been a worry for Greece but it is now spreading like wildfire, driving equity markets lower, causing further concerns about medium-term growth prospects."
At Capital Markets, analysts cited "major doubts" regarding Greece's capacity to rein in its public finance deficit and said Athens was not unique in the eurozone.
"Greece provides another very visible -- albeit extreme -- example of the fiscal pressures building in many economies," they said.
"The need for fiscal tightening in Greece is particularly pressing but others will eventually have to follow."
UniCredit researchers meanwhile predicted that "volatility and tensions on eurozone sovereign markets could easily become a constant feature of 2010," notably as countries seen as having shaky public finances will likely have to pay more to borrow money through the bond market.
In London on Friday, the euro was changing hands at 1.3613 dollars against 1.3726 dollars late on Thursday, 121.60 yen (122.19), 0.8713 pounds (0.8711) and 1.4670 Swiss francs (1.4641).
The dollar stood at 89.31 yen (89.01) and 1.0774 Swiss francs (1.0665).
The pound was at 1.5624.
The price of gold fell to 1,058 dollars at the fixing from 1,083.25 on Thursday.
