Wall Street looked set to open higher and European shares kept their gains on Friday despite a key U.S. jobs report that came in slightly worse than expected.

But the dollar extended losses against major currencies

The U.S. Labor Department said U.S. employment fell for the first time this year in June as thousands of temporary census jobs ended and private hiring grew less than expected.

But a mixed report also showed the unemployment rate fell to 9.5 percent, the lowest level since July, as people left the labor force.

Wall Street stock index futures pointed to a modestly positive open. Europe's FTSEurofirst 300 <.FTEU3> was up 0.7 percent.

Euro zone government bond yields were mixed and U.S. Treasuries were flat.

(Editing by Mike Peacock)