Early trade in New York: Dollar on backfoot against euro

NEW YORK: The dollar lost out to the euro after Friday's US jobs report suggested that some traders may have over-egged a stronger American recovery from the coronavirus pandemic.

The euro rose 0.6% against the dollar, its biggest daily gain in two weeks after the report, which Marc Chandler, strategist at Bannockburn Global Forex, said did more to force short-term traders to adjust long-dollar and short-euro positions than it changed the economic outlook for a US recovery that is stronger than peers.

The dollar index of a basket of currencies was down 0.4%, but still holding a weekly gain of 0.7%.

"This forces some of the late dollar-longs out," Chandler said. "It doesn't really change what to expect for Q1 GDP in the US Market positioning is a different story."

The report showed US employment growth rebounded less than expected in January and job losses the prior month were deeper than initially thought, strengthening the argument for additional relief money to aid the recovery from the COVID-19 pandemic.

The greenback was off 0.1% against the yen at 105.43.

The dollar index is still up 1.3% this year. Its rise has been supported by higher longer-term US Treasury yields, which prompted traders to position for massive fiscal spending.

The gauge rose in each of the first four days this week and before the jobs report was on track for a 1.1% weekly advance, the most since Nov. 1.