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The greenback climbed higher versus the euro on Friday but data from U.S. government showed jobs lost for the eighth straight month and the unemployment rate jumped unexpectedly, caused doubts about the resilience of the U.S. economy and dollar then retreated from its 11-month highs in New York session.

Earlier in the day, the single currency dropped to 1.4196, its lowest level versus the buck since October 2007, after release of weaker-than-expected German industrial production and retail sales data, which reported a decline of 1.8 percent and 0.6 percent respectively, however, price rebounded later in the day as U.S. government reported unemployment rate rose to its highest level since September 2003 at 6.1 percent (analysts' forecast was 5.7%), together with 84,000 jobs were lost in August, higher than the forecast of 75,000, while data for June and July were also revised to show bigger job losses. The euro quickly jumped to as high as 1.4349 but slipped afterwards, ended at 1.4272 by New York closing.

The greenback fell initially after the weak U.S. labour reports but rebounded in late U.S. session due to reverse in U.S. stock markets. The Dow Jones index dropped more than 150 points in early U.S. morning session in reaction to the disappointing unemployment rate but investors expect the U.S. Treasury would take steps over the weekend to rescue mortgage finance companies Fanny Mae and Freddie Mac and the index reversed to positive territories and ended at 11,220, up 32 points. The ICE Futures U.S. dollar index, which tracks the value of the greenback against a basket of six currencies, ended slightly higher at 78.989 on Friday.

Although the Japanese yen rallied against other major currencies this week on concern that credit-market losses will lead to a global recession, the dollar recouped early losses and the pair rebounded from its session low of 105.53, traded higher at 107.71 by the end of the day. The Australian and New Zealand dollars dropped to two-year lows of 85.04 and 69.90 respectively on Friday on bets a slump in stocks and commodities encouraged investors to reverse carry trades.

Data releases next Monday will include Japan Economic watch DI, Switzerland Jobless rate, U.K. PPI core, input and output, and Canada building permits. Next week's focus should be on Friday's U.S. retail sales and University of Michigan consumer sentiment survey data.