Dollar mixed in European trade

LONDON (AFP) - The dollar fell against the euro but rose versus the yen in European trading on Monday, after the US currency plunged last week on news of a jump in the US unemployment rate, dealers said. The euro climbed to 1.5807 dollars in early London trading from 1.5777 in New York late on Friday. Against the Japanese currency, the dollar increased to 105.68 yen from 104.90. "The dollar remains under pressure after Friday's sell-off in light of the disappointing payroll data, although there has been little fresh direction around as European traders return after the weekend break," said James Hughes at CMC Markets. The US jobless rate jumped to 5.5 percent in May as the world's largest economy lost 49,000 jobs, official figures showed. Most economists had expected a sharply lower unemployment rate of 5.1 percent. The increase was the largest monthly change since February 1986. European Central Bank chief Jean-Claude Trichet's warning of a possible rise in eurozone interest rates in July also boosted the euro to the detriment of the dollar, traders said. Trichet cited projected record high inflation in the eurozone this year, fuelling the likelihood of rate tightening and in turn making the euro more attractive to investors. Friday's sharp fall in the dollar meanwhile contributed to a jump in a key New York oil futures contract, which leapt 10.75 dollars a barrel the biggest one day jump ever to a record-high 139.12 dollars. The oil price rally and the bleak job report triggered the worst day on US stock markets in 15 months as the Dow Jones Industrial Average plummeted 394.64 points (3.13 percent) to end at 12,209.81. The pound shot higher after official figures showed that the cost of goods leaving British factories surged to record highs in May for the second month running as the cost of raw materials continued to soar. Analysts said the data meant that the Bank of England would have difficulty in cutting interest rates to boost flagging economic growth, as it seeks to control surging inflation. In London early on Monday, the euro changed hands at 1.5807 dollars against 1.5777 late on Friday, at 166.99 yen (165.52), 0.8001 pounds (0.8004) and 1.5803 Swiss francs (1.6068). The dollar stood at 105.68 yen (104.90) and 1.0203 Swiss francs (1.0182). The pound was at 1.9753 dollars (1.9706). On the London Bullion Market, the price of gold jumped to 904.07 dollars per ounce from 890.50 dollars late on Friday.

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