The US dollar gained against the euro after bigger-than-expected US job losses in September revived demand for the greenback as a safe haven.  The Labor Department reported the unemployment rate rose to 9.8 percent, the highest rate since June 1983, as US job losses last month totaled 263,000.  Markets were expecting payroll declines of 180,000. The news pushed the dollar to a three-month high versus the euro before erasing its gain as the weak jobs data raised concerns that the US economy was not recovering as fast as expected.

The euro gained against the US dollar and erased earlier losses after US job losses came in worst-than-expected. The single currency initially fell to a three month low against the dollar as risk aversion emerged in the market.   As the weak September US jobs report settled, fears the US economy is not on a fast recovery pushed the euro higher.

Sterling fell against the US dollar on waning risk appetite as markets digested news of a weaker-than-expected US payrolls report. The report caps a week of mixed data that has cast doubt on the pace of economic recovery.  The pound also failed to gain traction after a UK housing market survey from mortgage lender Nationwide showed house prices were steady on the year in September -- the first time since March 2008 that prices have not fallen on a year-on-year basis.

The Japanese yen strengthened against the US dollar and advanced to the strongest level against the euro since July as US employers eliminated more jobs last month than economists forecast, discouraging demand for higher-yielding assets. 

The Canadian dollar fell against the US dollar as a weaker-than-expected US jobs report fueled concerns about the global economic recovery.  Other factors weighing on the Canadian currency included weak oil, a key Canadian export, and lower gold prices, as well as sliding global equity markets.

The Australian dollar managed to end the week with gains against the US dollar for the seventh week in a row, despite nursing slight losses on the day as investors took profits ahead of a key US jobs report.  The New Zealand dollar stabilized after falling more than a cent to a 10-day low, as a sharp retreat in equity markets prompted investors to sell high-yielding currencies.

Indicative rates:

EUR/USD

1.4647

USD/JPY

88.75

GBP/USD

1.5947

USD/CAD

1.0791

USD/MXN

13.6736

USD/CHF

1.0310

AUD/USD

0.8713

NZD/USD

0.7210

USD/DKK

5.0827

USD/SEK

6.9867

USD/NOK

5.7728

USD/TWD

32.170

USD/CNY

6.8263

10-Year Treasury Note Yield:  3.201%

Dow Jones Industrial Average:  9,496.06 -12.47