The dollar and Japanese yen weakened on Friday as investors' fears that the U.S. employment report would be much worse than expected turned out to be unfounded as the non-farm payrolls figure came in close to the market consensus with 651,00 jobs lost in February (economists had expected 648,000), however, the unemployment rose from 7.6% to 8.1% compared to the median forecast of a 7.9% rate.

Dollar fell across the board as traders squared long positions ahead of the release of the closely-watched U.S. non-farm payrolls data, with rumours that the figure could be as high as one million increasing nervousness among market participants.

The euro and British pound hit intra-day highs of 1.2755 and 1.4306 respectively before retreating in New York afternoon session as trades were exited ahead of the weekend, with the sterling falling sharply on active cross trading to 1.4037 before ending the day at 1.4092. The single currency strengthened to 1.2655 and 124.39 against the dollar and yen respectively.