NEW YORK, Aug 2: The dollar fell against the euro on Friday after the government released a worse-than-expected snapshot of the US job market, which sparked a dollar sell-off that reversed gains made on Thursday.

At 2115 GMT, the euro had climbed to $1.1268 from $1.1233 late Thursday.

The US currency also fell against the yen, dropping to 120.13 yen at 2115 GMT, compared with 120.49 yen late Thursday.

Traders said the dollar weakened largely due to the job losses revealed in the July jobs’ report, released by the Labor Department on Friday morning.

“The dollar has given up quite a bit of ground. Expectations were very high before the numbers...the market got a little bit long,” said Andrew Delano, a foreign exchange analyst at IDEAGlobal.com.

Market participants said the jobs’ report — which showed employers shed 44,000 jobs from the workforce in July, bringing six months of total job losses to 486,000 — tempered optimism the economy was rebounding.

Analysts had predicted a slight rise in employment in July.

Many traders had believed the economy was showing firm signs of a rebound from the Iraq war malaise prior to the release of the jobs data.

“Although the market is bullish about the recovery, there are some doubts about the strength of the recovery in the second half of the year, even though data this week has been better than of late,” Mr Delano said.

Declines in the stock markets Friday, especially the Dow industrials, also dented confidence in the dollar.

Traders said they are now casting their focus forward to next Thursday’s weekly snapshot on weekly unemployment claims.

“If they (unemployment claims) stay below 400,000 for the third week in a row, it might lend credence to the notion that the job market is starting to heal,” Mr Delano added.

The dollar was being quoted in late New York trade at 1.5383 Swiss francs, unmoved from Thursday. The dollar was at 0.7000 pounds sterling from 0.6976 pounds on Thursday.—AFP